Stocks on our Buy/Sell/Hold are drawn from the top gainers and losers of the prior week, as well as various analyst’s reports.
Dangote Cement: HOLD
Recent results
Results for the third quarter ended September 30, 2018, show that revenue for the company increased from N603 billion in 2017 to N685 billion. Profit before tax increased from N220 billion in 2017 to N247 billion. Profit after tax also increased from N154 billion in 2017 to N158 billion.
Price Information
Current Share Price: N192
Price to Earnings Ratio: 20X
Price to Book Ratio: 4.2
Year to Date: 1.2%
One Year return: -23.09%
External View
Analysts at United Capital have a ‘Buy’ rating on the stock. They have a 12-month target price of N235, which represents a potential upside of 20.6% from the stock’s price as at when the report was prepared.
Analysts at FBNQuest have an ‘Overperform’ rating on the stock. They have a target price of N274.5 which represents a potential upside of 40.9% from the stock’s price of N194.9 as at when the report was prepared.
Our View
Dangote Cement is a HOLD in Nairametrics’ opinion.
While the stock is trading at a PE ratio nearly 4 times higher than CCNN, the stock is trading close to its 52 week low. Possibilities of a 50% dip in price which would be a good entry point, are rare at this stage, especially as earnings season draws close.
Newrest ASL: HOLD
Recent Results
Results for the nine months ended September 30, 2018, show that revenue increased by 42% from ₦2.8 billion in 2017 to ₦4.2 billion in 2018. Profit before tax jumped from ₦189 million in 2017 to ₦1 billion in 2018.
Price Information
Current Share Price: N7.15
Price to Earnings Ratio: 3.99X
Price to Book Ratio: 1.40
Year to Date Return: -9.5%
One Year Return: 38.22%
External View
None
Our View
Newrest ASL is a HOLD in Nairametrics’ opinion. The company is in the process of delisting. Precedence from other delisted companies indicates that minority shareholders would most likely be offered a buy out price.
This could lead to a slight rally in the stock’s share price. While this is profitable, from a speculative basis, this does not qualify it as a BUY. The stock is likely to trade in a somewhat volatile manner, once terms and conditions are announced.
NEM Insurance: HOLD
Recent Results
Results for the half year ended September 30, 2018, show that gross premium written increased from N11 billion in 2017 to N12 billion in 2018. Profit before tax dipped slightly from N2 billion in 2017 to N1.89 billion in 2018. The drop in profit before tax was, however, minute, moving from N1.69 billion in 2017 to N1.6 billion in 2018.
Price Information
Current Share Price: N2.39
Price to Earnings Ratio: 4.51X
Price to Book Ratio: 1.29
Year to Date Return: -11.5%
One Year Return: 31.32%
External View
None
Our View
NEM Insurance is a HOLD in Nairametrics’ opinion, despite a year to date decline on the NSE, far lower than the All Share Index.
The stock was the best performing stock last week, gaining 43%, and will need to decline significantly to warrant an entry.
Disclaimer
Please consult your stockbroker or financial adviser before making a Buy/Sell decision.
