As far as the Nigerian Stock Exchange goes, this has been one of its worst years since the dark years of 2007, 2008 and 2009. The All Share Index is down 13.9% year to date with over a trillion lost in market capitalisation. However, amidst a rather volatile market some stocks buck the trend taking it as an opportunity to post amazing returns.
At the beginning of the week Okomu Oil gave no indication that it was going for an impressive ride. The stock closed flat on the first day of trading last week and lost 2.3% the next day. To some investors this was one of those misery runs that ends up gaining 5% maximum by the end of the week like it did the week before. But by Wednesday things started to happen. The bulls appeared helping the stock gain 5% by close of business. Another 10.2% was to follow on Thursday before it closed the week even stronger on Friday with a gain of 10.5%. The last time Okomu Oil gained 10% in back to back days was on August 31st and September 1st respectively. What was to follow was a somewhat consisted run of bulls and bears that has taken its share price from N22.68 on September 1st to N35 as at close of business Friday.
Indeed Okomu Oil has now gained a whopping 41% YTD making it one of the best stocks of 2015. In fact, if you bought this stock back in August 27th when it was N19.6 you probably should be posting about 78.5% by now. This is how rewarding the Nigerian stock market can be even amidst one of its worst years in recent times.
As expected no one knows why the stock is attracting such a bullish run. Okomu Oil is not paying any dividends anytime soon and is yet to announce its third quarter results. With over 10 million shares crossing hands between Thursday and Friday and RSI over 80x, it appears the stock is fully on bullish run. In terms of Fundamentals, Okomu Oil has posted a decent set of results in 2015. Its half year pre-tax profits is 24% up than what it reported in 2014. It also paid dividend of 25 kobo per share this year despite a poor 2014 where profits were down 26%.
An investor who had bought into the stock earlier in the week believes the stock is probably headed for N50 by the end of the year. An optimism we fully do not share in. Nairametrics has shown a few concerns in the past about Okomu Oil particularly the way it reported its 2014 results. What we however cannot argue against is the fact that the company has now posted the best returns this month making it the best performing stock this month. It is also only second to Beta Glass as the best performing stock this year. It is currently at the top of the charts and could remain there if the gods permit. We know well not to bet against the gods.