As usual we present to you a list of stocks to watch for the week August 25-29 2014. It includes stocks that we have placed on our watch list as we expected significant movement in price or an imminent announcement. [upme_private]
Caverton – The helicopter company has taken a beaten since it first debuted back in May 2014. It closed last week a bit lower at N5.60 which is still relatively at its one month low. The stock appears oversold and is looking like a stock getting set for a rebound again. It’s not that any resurgence is based on any fundamentals is just that I feel the forces of demand and supply will come into play sooner rather than later
Premier Breweries – I honestly do not know what has pushed this stock up 70% in the last one month already. I did mention the rise has been accompanied by small volume sales indicating there is very little supply for the stock. This might just be another week with another 10% gain or the start of a pull back. No matter what it is I am not sure I want to be part of the run.
FBNH – This is one banking stock that has largely under performed over the course of the year. It has dropped to as low as N11.66 back in March and if you had bought it then you should be 25% up at its current one month low of N14.6. It’s a twist of a tale really as you wonder if it’s going to still go down or if it is going to find its way back up. I look at the indices and it tells me the stock appears oversold and possibly undervalued based on current fundamentals. This is one stock to watch this week too.
Diamond Bank – Diamond Bank makes our watch list this week as its rights issue is expected to close on Tuesday. There is pressure from shareholders to postpone the issue but I doubt they will take that route. The message it will send will not be that of shareholders seeking extension but that of the bank not being able to get a full subscription. The company also announced new majority shareholders at the end of last week as the Dozie family acquired actis shares to take their holdings to above 20% giving them a tighter control. The theoretical ex price post rights issue is expected to be around N6.36 but I doubt it will remain so beyond a day. This stock is heading below N6 sooner rather than later in my opinion.
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Flourmills – The company was marked down last week after its N2.1 dividend and 1 for 10 bonus issue was reflected on its share price. The company topped the losers chart with a 16% drop mostly due to the mark down and the effects of the bonus issue. At N2.1 the dividend yield for those who own the shares should be about 3% today (at a price of N68). The stock opened the week at N80. I still see the stock going further south as profit taking continues.
Others of note
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There are a few stocks bubbling under which as usual will gain or lose an odd 10%. Connerstone Insurance is looking like a stock that is on the upswing. NEM Insurance may also make an important announcement this week. GTB announced its results last week which was followed by a small drop in its value. The dividend proposed is likely to keep the share price between 28-29 in my view. Seven Up is likely to continue its gradual rise to the top and N130 doesn’t look far fetched.
Disclaimer: Stocks selected are based on our research and instinct. We do not claim to predict price movements or recommend any of these stocks. [/upme_private]