Nigerian stocks, Buy Sell Hold

Buy/Sell/Hold is picked from the top gainers and losers of the previous week as well as various analyst reports.

Wema Bank: SELL

Latest Results

The bank reported net interest income of ₦9.09 billion for the period ended June 2018, compared to ₦8.48 billion reported for the period ended June 2017.

Profit before tax was ₦1.81 billion for the period ended June 2018, a 27% increase from ₦1.43 billion reported for the period ended June 2017.

The company’s profit after tax for the half year ended 30th June, 2018 was ₦1.57 billion, as against ₦1.22 billion recorded in H1 2017.

Price Information

Current Share Price: ₦0.63
Price to Earnings Ratio: 9.32X
Price to Book Ratio: 0.47
Year to Date Return: 21.15%
One Year Return: 26%

External View

Analysts at Afrinvest have a ‘Hold’ recommendation on the stock. They have a one-year target price of ₦0.57, which indicates a 1.8% upside from the stock’s price of ₦0.56, as at when the report was prepared.

Our View

Wema Bank is a SELL in Nairametrics’ opinion. The bank is trading at a PE ratio much higher than that of its tier two peers such as Fidelity Bank trading at 1.38 times earnings and Sterling Bank which is trading at 3.91 times earnings.

The stock has also outperformed the All Share Index which is down 14.4% year to date. Investors would be better off selling, then re-entering at a lower price.

CAP Plc: HOLD

Latest Results

Results for the half year ended June 2018  show that revenue increased from ₦3.4 billion in 2017 to ₦3.8 billion in 2018. Profit before tax also grew from ₦1 billion in 2017 to ₦1.3 billion in 2018. Profit after tax rose from ₦696 million in 2017 to ₦917 million in 2018.

Coronation Research

Price Information

Current Share Price: ₦31
Price to Earnings Ratio: 14.4X
Price to Book Ratio: 9.6
Year to Date Return: -8.82%
One Year Return: 0.70%

External View: None

Our View

CAP Plc is a HOLD in Nairametrics’ opinion.  While the stock is trading 22.5% below its year high of ₦40, possibilities of a further sharp decline are low due to the Illiquid nature of the stock.

Cutix Plc: HOLD

Latest Results

Results for the first quarter ended July 2018 show that revenue increased from ₦1.2 billion in 2017 to ₦1.3 billion in 2018. Profit before tax increased from ₦160 million in 2017 to ₦171 million in 2018. Profit after tax increased from ₦104 million in 2017 to ₦111 million in 2018.

Price Information

Current Share Price: ₦2.20
Price to Earnings Ratio: 4.29X
Price to Book Ratio: 1.30
Year to Date Return: 9.45%
One Year Return: 10.81%

External View: None

Our View

Cutix Plc is a HOLD in Nairametrics’ opinion. This week, the stock was marked down for a one for one bonus and a ₦0.20 dividend. The stock has since rebounded, gaining in the last two trading sessions.

Okomu Oil: SELL

Latest Results

Results for the half year ended June 2018 show that revenue increased from ₦12.4 billion in 2017 to ₦12.9 billion in 2018. Profit before tax dropped from ₦7.8 billion in 2017 to ₦6.9 billion in 2018. Profit after tax also dropped from ₦6.2 billion in 2017 to ₦5.9 billion in 2018.

Price Information

Current Share Price: ₦79.8
Price to Earnings Ratio: 8.59X
Price to Book Ratio: 2.75
Year to Date Return: 17.89%
One Year Return: 27.23%

External View

Analysts at FBN Quest have an ‘Underperform’ rating on the stock. They have a target price of ₦88, indicating a potential upside of 11.3% from the stock’s price of ₦79.8 as at when the report was prepared.

Analysts at United Capital have a BUY rating on the stock. They have a target price of ₦99.8, indicating a potential upside from ₦79.8 as at when the report was prepared.

Our View

Okomu Oil is a SELL in our opinion, as the stock is trading at a PE ratio of nearly three times its peer, Presco Plc, which is trading at 2.2 times earnings.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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