Stocks on our Buy/Sell/Hold list are drawn from the top gainers and losers of the previous week, as well as various analysts’ reports.
Diamond Bank: HOLD
Recent Results
Results for the third quarter ended September 30, 2018, show that gross earnings for the group dropped from ₦143 billion in 2017 to ₦142 billion in 2018. Profit before tax fell from ₦4.7 billion in 2017 to ₦3.08 billion in 2018. Profit after tax also dipped from ₦3.9 billion in 2017 to ₦1.6 billion in 2018.
Price information
Current Share Price: N1.81
Price Earnings Ratio: None (the bank made a loss last year)
Price to Book Ratio: 0.18
Year to Date Return: -21.48%
One Year Return: -20.67%
External View
Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a year end target price of N2.1 per share, which represents a potential upside of 40% from the stock’s price of N1.50, as at when the report was prepared.
Our View
Diamond Bank is a HOLD in Nairametrics’ opinion. A hold recommendation does not mean that investors should take position in the stock. Rather those already in would be better off not selling for now. The stock has largely rallied since news of a potential merger with Access Bank broke. The stock would most likely continue an upward price movement till it gets close to the N3.13 in value which Access will be paying.
Ikeja Hotels: HOLD
Recent Results
Results for the nine months ended September 30, 2018, show that revenue increased from N8.5 billion in 2017 to N9.7 billion in 2018. Profit before tax rose from N790 million in 2017 to N1 billion in 2018. Profit after tax also rose from N537 million in 2017 to N664 million in 2018.
Price Information
Current Share Price: N1.70
Price Earnings Ratio: 25.86X
Price to Book Ratio: 0.26
Year to Date Return: -4.49%
One Year Return: -4.49%
External View
None
Our View
Ikeja Hotels is a HOLD in Nairametrics’ opinion. The stock has outperformed the All Share Index which is down 17.73%. 9M 2018 results also show a marked improvement from the comparative period of 2017. Investors keen on taking positions may have to wait a while, as the stock is largely illiquid and may not show price correction anytime soon.
Forte Oil: HOLD
Recent Results
For the 9 months ended September 30, 2018, revenue increased from N68 billion in 2017 to N94.8 billion in 2018. The company made a profit before tax of N78 million, compared to a loss of N626 million recorded in 2017.
Profit after tax (including discontinued operations) stood at N9 billion in 2018, compared to the N5.6 billion recorded in 2017.
Price Information
Current Share Price: N34.35
Price Earnings Ratio: 14.07X
Price to Book Ratio: 2.6
Year to Date Return: -21%
One Year Return: 21%
External View
None
Our View
Forte Oil is a HOLD in Nairametrics’ opinion. A HOLD recommendation means that investors holding the stock should maintain their positions. This week, the company announced the intention of Femi Otedola to divest his entire holding.
The company would most likely provide more information on the potential new owner in the days ahead.
Access Bank will be paying N1 per share and 2 new Access bank share for every 7 Diamond bank share that they own.
1 What those this mean
2. Who is gaining Access bank or Diamond Bank
OYELEKE EMMANUEL .
Good morning. To your first question, Diamond Bank will no longer exist, after the merger. If approved, Diamond Bank shareholders will get N1 for every Diamond share that they own. In addition, they will be given Access Bank shares to replace their Diamond shares. The two banks will benefit from the transaction,as they will be a bigger entity.