The first quarter of 2018 has come and gone and we now know which stocks led the gainer’s chart. Before we get to that let’s not forget how incredible 2018 has been so far.
The year started in a blistering form with the All-Share Index gaining 14% by the end of January. By February ending stocks were up by 11% even despite a bumpy month which saw stocks lose 4% on the bounce.
The results for the end of the first quarter of 2018 shows Nigerian Stocks ending the first quarter of the year with a gain of 8.53%. On a month to date basis stocks are down 4.2%. Some analysts believe this is the market not entirely happy with some of the recent results being announced. Others believe the year started so fast, it was inevitable that we get some pullback.
Despite a poor March, there is much cause to celebrate for the 75 stocks that posted gains this quarter. Out of this number, another 51 posted incredible double-digit gains. We compiled the best 5 stocks this quarter with annotations on what may have made them so special.
Starting in ascending order
5. NPF Microfinance Bank +70%
This stock started the year brightly as its share price rose from N1.25 at the start to close January at about N1.86. It stayed flat for most of February but closed at N2.12 in March helping the stock hit 90% Year to date. There is nothing seemingly special about the fundamentals that you could attribute to the share price hike. Yes, the company’s earnings per share was up 16% (released on Thursday) but this does not justify the price hike.
Our guess is that either we expect a significant uptick in dividends or the company is about to raise equity. Important to note that the share price fell on Thursday the 5th of April a day after the results dropped. Price to earnings ratio of 7.43X suggests it’s hit a ceiling.
4. Wema Bank Plc +90%
Wema Bank closed 2017 at 56 kobo per share but by early February its share price was more than double and traded at a year high of N1.50 (almost 300%). It has since tanked from those lofty heights and currently trades at 88kobo. The share price is up 90% year to date.
The company is yet to release its 2017 annual report so we really don’t know what’s behind the rally. Hard to bet in favour of this stock maintaining this momentum by the end of this quarter. It’s Price Earnings Ratio of 11x makes it look more expensive than the likes of Zenith Bank and GT Bank.
3. CCNN +97%
The Cement Company has mostly lurked in the shadows of giants like Dangote Cement and Lafarge. However, it has performed better than the duo in terms of share price appreciation. Again the growth spurt began in January 2018 at just under N10 and by early February it was trading at N17+. It hit a high of N19.2 and has since dropped to about N18.
The company’s fundamentals have been great with earnings per share up 157% year on year. They also proposed dividends of N1.25kobo. Our take is that some investors may have either gotten wind of the results or anticipated a bountiful 2017. Price-earnings ratio is 7.21 suggesting there might still be some upside for capital appreciation.
2. Caverton Offshore Helicopters +107%
A string of deals last year has helped the oil servicing company reposition itself as the leading helicopter provider for the oil sector in Nigeria. The company’s earnings per share are up 328% year on year and they also declared dividends of 15 kobo per share. It appears the market so this coming too with the share price rising from N1.29 to a year high of N3 per share.
The stock still trades at a P/E ratio of 3.31 suggesting that it is still quite cheap. The determinant factor here is whether it can at least sustain the current earnings per share of 77kobo.
1. Unity Bank
The embattled tier 2 bank has been in the midst of an acquisition controversy this year. Before rumours started to swell and before Milost confirmed it was looking to invest in the bank, investors have helped the share price rise from a mere 55 kobo to as high as N1.92 in February. The share price has since plummeted as the so-called deal with Milost collapsed amidst the controversial nature of the transaction.
With no concrete information available about any other investor, the market seems to have had enough and a sell-off appears to have ensued. Nevertheless, the share price is still up 130% YTD and is the best performing stock on the exchange. At a Price earnings ratio of 10x the stock is in the expensive category.
Get the list of all stocks and their performance in Q1 here