Buy/Sell/Hold is a weekly column which samples opinions on a variety of stocks. Stocks are picked from gainers and losers of the previous week, as well as analyst reports by several investment houses.
Here are the stocks on our Buy Sell or Hold list for the week ending 25th May 2018.
Continental Reinsurance: HOLD
Latest Results: Results for the first quarter ended March 2018, show that gross premium written increased from N6.5 billion in 2017 to N7.7 billion in 2018.
Pricing
Current Share Price: N1.50
Price to earnings ratio: 4.8X
Price to book ratio: 0.763
YTD return: 7.14%
One Year Return: 28.57%
Analysts View
Analysts at Afrinvest have placed a REDUCE recommendation on the stock. This means that the total return on the stock is expected to be nil or negative. They set a target price of N1.40, which is below the N1.53 that the stock was at the time of the report.
Our view
Continental Reinsurance, in our view,is a HOLD. While it is trading at a PE ratio higher than peers like AIICO Insurance which is trading at 3.1 times earnings, it is at a lower multiple compared to Mansard which is trading at 12.8 times earnings.
Okomu Oil: HOLD
Latest results: Results for the first quarter ended March 20q8 show that revenue increased from N5.8 billion in 2017 to N7.3 billion in 2018. Profit before tax increased from N3.3 billion in 2017 to N3.9 billion in 2018.
Profit after tax also went up from N3.0 billion in 2017 to N3.4 billion in 2018.
Pricing
Current Share Price: N78.40
Price Earnings Ratio: 7.83X
Price to Book ratio:2.67
Year to date return: 15.82%
One Year return: 62.50
External View
Analysts at FBN Quest have placed a NEUTRAL rating on the stock. They have a target price of N91.5 a 16% upside from its current price of N78.4.
Our View
Okomu Oil is a HOLD in Nairametrics view. Though the stock is trading at a PE ratio of nearly twice its peer Presco,it has twice the latter’s earnings. The stock is also trading at 12.8% below its year high of N90.
Fidelity Bank: BUY
Latest Results: Results for the first quarter ended March 2018 show gross earnings increased from N40.8 billion in 2017 to N43.6 billion in 2018. Profit before tax rose from N4.8 billion in 2017 to N4.98 billion in 2018. Profit after tax was also up from N4.3 billion in 2017 to N4.6 billion in 2018.
Pricing
Current Share Price: N2.20
Price to earnings ratio: 1.73X
Price to book ratio: 0.35
YTD return: -10.57%
One year return: 134.78%
External View
Analysts at FBN Quest have placed an UnderPerform rating on the stock. They have a target price of N3.3 which is 26% higher than their target price of N2.7.
Analysts at Afrinvest have placed a SELL recommendation on the stock. It is currently trading above their target price of N1.76 from its prior price of N2.52 when the report was prepared.
Our View
Fidelity Bank is a BUY to Nairametrics. The stock is currently trading at a PE ratio below peers like FCMB which is trading at 4.85 times earnings. Fidelity is also down 48% from its year high of N4.4.
This is not a buy sell or hold recommendation. Remember to consult a competent financial analyst or stockbroker if you need help with your investment decisions.
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