Redstar Express recently released its 2014 year-end results. For a penny stock investor like myself, it’s one of the few stocks worth investing in, despite current market volatility. The logistics industry has proven to be resilient in the midst of economic downturn. Redstar has a solid history of conservative dividend payments and the occasional bonus. If all the penny stocks on the Nigerian bourse were made to run a marathon, Redstar would definitely win a medal. I’d rather not mention the stocks that would be losers.
Year end results showed a decline in profit after tax, though revenue and profit before tax increased. Earnings per share for the group also declined slightly from 68 kobo to 65 kobo. This trend appeared to be industry related as its competitor listed on the exchange, Trans Nationwide Express also saw decline in profits. That scenario appeared to have reversed in its Q1 2015 results, with the company seeing an increase in both turnover and profits.
For the year ended March 2015, the company’s management has proposed a dividend of 35 kobo per share. From an earnings per share of 65 kob0. The same amount declared in the previous year. Both are twice the proposed dividend and earnings per share of Trans Nationwide express which were 10 kobo and 34 kobo respectively.
While Redstar may be a good stock to buy, at current prices its bit expensive for a long-term investor like myself. For the past five trading days, it has traded in a range of 4.60 naira to 5 naira. For speculators intending to buy because of possible appreciation due to prospective dividends, playing the markets is like predicting numbers before rolling a pair of dice.