Neimeth Pharmaceuticals Plc released its audited results on Jan 31 showing a profit of N130million compared to the N40million loss it posted a year earlier. Revenue also rose 30% and adjusted operational profit 659%. It was indeed a great result for the company and not surprisingly it is now being rewarded heftily by the market.
Prior to when the results was announced, Neimeth was trading for N1.57. At the close of trading today it closed at N2.27 a 44.5% increase in a span of 7 days (57.6% YTD)!! Is this reward justified? Well only a proper valuation of their shares will tell in my opinion. However, gleaning from the market data, Nemeth currently trades at 22.7x P.E ratio and a Price to book ratio of 1.6x. By most standards that is an expensive stock despite this recent results. And I haven’t heard any news yet that suggest the company was unto something big.
Nevertheless it’s the market and at this rate I won’t be surprised if the stock gains 100% in the next month. Neimeth is not in our portfolio and we have no plans of buying it at the moment.
