So much has been said already about the mad month of May for stocks. Being a month that heaped losses on investors, you can’t be blamed if you were caught up in the sell-offs and perhaps recorded losses.
However, there are stocks that fared so bad in May, we doubt that they might recover the losses before the end of the year. We are no doomsayers but from what we see, recovery may be hard for these stocks in terms of reaching their year highs.
Let’s take a look at some of them.
Diamond Bank – The tier 2 bank’s stock has received some pummeling since it reported a rather disappointing N9 billion loss after tax. The bank has not had it good in the last few years, as it continues to clean up its books by writing off more losses. Diamond Bank’s share price fell by 34% in May alone and was the worst performing banking stock on the exchange.
Can it recover by the end of the year? We doubt it. Word on the street suggests that the bank is making progress about restructuring some of its bad loans, particularly Geometric; however, it is still not enough to convince us just yet. At N1.32, it will have to almost triple to get back to its year high of N3.50.
Japaul – Since the Milost deal was yanked off its table, it’s been downhill for this stock. The company is essentially insolvent and it’s incredible that they are still listed as a public company. It lost a whopping 56% in May alone and as things stand, we do not see them recovering any time soon, or indeed, the distant future. Japaul’s year high was 97 kobo, however, it closed at 21 kobo. To get back to this level, it will have to nearly quadruple in share price appreciation.
Fidelity Bank – This is one stock I really still like but it fell into the cold bloody hands of May. The tier 3 bank’s stocks lost a whopping 25% this May alone. For a stock that dominated in 2017, and was by far the best banking stock in terms of shareholder returns, May was one to forget. At N1.81, it is off its year high of N3.99 and will need to double to get back there.
Dangote Flour – This stock has been on our radar for some weeks now and it is a good thing that we haven’t decided to buy yet, especially as the share price keeps sliding. It lost 30.5% in May and closed at N8.95. This is a stock that had a previous year high of N16.90 and to get back to that level, it will have to at least double in size. Of the lot, this one perhaps is mostly to return to its former level but for now, it makes our lists.
So what do you think? Did we miss out any stock?
Pls when will all the profits of forte oil be attributable to its share holders so that it be reflected in the company’s earnings per share. Will the current restructuring lead to that?
It could lead to that. All profits will be attributable to shareholders when they own 100% of the company. Minority interest has to be at least 5% and below. This current restructuring might lead to that for Forte Oil.
With Fidelity trading at a P/E Ratio of less than 1.75, it is currently the cheapest Banking stock valuationwise. I would be surprised, if it failed to see a new high this year.
Fidelity is surely bound to recover on the short run. It should not be on the list of stocks that may not recover. No.