These stocks have posted returns higher than their sector GDP growth rate

Key Highlights

• Real Quarterly GDP Growth – 1.95%
• Quarter- on- quarter Reduction – (0.16)
• Aggregate Nominal GDP – N28,464,322.01million
• Non-oil Real GDP Growth – 0.76%
• Oil Real GDP Growth – 14.77%
• Stocks with above 10% YTD returns – 38
• Stocks that grew faster than Real GDP – 9

The National Bureau of Statistics (NBS) has released Nigeria’s Gross Domestic Product (GDP) figures for the first quarter of 2018. GDP is a monetary measure of the market value of all final goods and services produced in a period of time.

The NBS report shows that the Nigerian economy grew by 1.95% (year-on-year) in real terms, maintaining its positive growth since the emergence of the economy from recession in Q2 2017. This shows a stronger growth when compared with the first quarter of 2017 which recorded a growth of -0.91% indicating an increase of 2.87% points.

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However, when compared to the preceding quarter, there was a decline of -0.16% points from 2.11%. Quarter on quarter, real GDP growth was -13.40%. Nevertheless, the report noted that oil production estimates for the third and fourth quarters of 2017 have been revised and oil GDP for those quarters have been adjusted accordingly.

After looking through GDP numbers, what an investor is expected to do next is figure out which stocks are at least posting returns that are higher than GDP numbers.

We looked at stock’s performance YTD (as at May 21, 2018) and had a list of 37 stocks that are posting returns that are 10x faster than the GDP Growth rate for their corresponding sectors as classified by the National Bureau of Statistics.

We also did something. Real GDP is discounted for the inflation rate, so to determine stocks that have returned an inflation-adjusted return higher than GDP we adjusted their YTD returns by January to April average inflation. Average inflation rate for this period is about 13.82%.

Only 9 stocks posted returns that were faster than their GDP Growth rate. These are Unity Bank, Fidson, Beta Glass, CAP, CCNN, Eterna Oil, Caverton, Learn and Red Star.

Of the lot, perhaps only Unity Bank and Fidson seem out-of-place with returns hardly justified by fundamentals. Our favourites are CCNN, Caverton and Beta Glass.

See data tables (feel free to sort, filter and move sideways especially if using a mobile phone or tablet)

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