Zenith Bank hit a two year low today after it closed below N19 for the first time since December 2012. The share price closed trading today at N18.77 making it its worst price this year and down 4.2% in the last one year.
The stock now has a price earnings ratio of 6.2x.
Why the drop?
Zenith Bank like many stocks has been hit by by a market sell off that has refused to wane. After dropping below N20 earlier in November, the share price rose again to about N22 before hitting this new low. This drop appears not to have anything to do with the company fundamentals in my opinion. The share price is simply reacting to market technicalities as the forces of demand and supply hold sway.
Time to buy?
It depends on your investment horizon. If you are a long term player then this price looks like a steal. However, a short term player will have to be a bit more careful as share prices are currently very volatile. Play short term if you are good at timing the market.
Disclaimer: Nairametrics owns shares in Zenith Bank