Buy Sell Hold Stocks

Stocks on our Buy/Sell/Hold list are drawn from the top gainers and losers of the previous week, as well as various analyst reports.  

BOC Gases: HOLD  

Recent Results: Results for the half year ended June 2019 show that revenue increased from N1.36 billion in 2018 to N1.48 billion in 2019. Profit before tax fell from N213 million in 2018 to N188 million in 2019. Profit after tax dropped from N147 million in 2018 to N128 million in 2019.  

Price Information 

Current Share Price: N6.12  

Price to Earnings Ratio7.47X 

Price to Book Ratio: 0.93  

Year to Date: 45.4%  

One Year Return: 60.83%  

External View: None  

Our View 

BOC Gases is a HOLD in Nairametrics opinion. The stock is currently trading at a 5 year high outperforming the NSE All Share Index which is down 12.09% year to date. While H1 2019 results show a marginal decline (due to disruptions in gas supply), management was optimistic that gas supply would be much more stable in the second half of the year.

Zenith Bank: HOLD  

Recent Results: Results for the half year ended June 2019 show that revenue increased from N322 billion in 2018 to N331 billion in 2019. Profit before tax rose from N107 billion in 2018 to N111 billion in 2019. Profit after tax also rose from N81.5 billion in 2018 to N88.8 billion in 2019.  

Price information 

Current Share: N18   

Price to Earnings Ratio: 2.96X

Price to Book Ratio: 0.69  

Year to Date Return: -21.9%  

One Year Return: -8.57%  

External View 

Analysts at United Capital have a Buy rating on the stock. They have a 12 month target price of N35. This represents a potential upside of 115.1%, from the stock’s price of N16.00, as at when the report was prepared.  

Analysts at FBNQuest have an ‘Over perform rating on the stock. They have a target price of N36.4, which represents a potential upside of 119.5%, from the stock’s price of N16.60, as at when the report was prepared.  

Analysts at SBG securities have a Buy rating on the stock. They have a target price of N37. This represents a potential upside of 122% from the stock’s price of N16.60, as at when the report was prepared.  

Our View  

Zenith Bank is a HOLD in Nairametrics opinion. While the stock is trading at a PE ratio far lower than the average PE on the NSE, it has not shown sufficient year to date decline to warrant entry.  

 Unilever Nigeria: SELL  

Recent ResultsResults for the half year ended June 2019, show that revenue fell from N48.1 billion in 2018 to N42.6 billion in 2019. Profit before tax fell from N7.5 billion in 2018 to N4.6 billion in 2019. Profit after tax declined from N5.5 billion in 2018 to N3.5 billion in 2019.  

Price Information 

Current Share Price: N27  

Price to Earnings Ratio: 16.36X

Price to Book Ratio: 1.99 

Year to Date Return: -27.0%  

One Year Return: -46.27%  

 External View 

Analysts at FBNQuest have a Neutral rating on the stock. They have a target price of N25.1, which represents a potential downside of 10.2%, from the stock’s price of N27.90, as at when the report was prepared.  

Analysts at United Capital have a Buy rating on the stock. They have a 12 month target price of N47.90. This represents a potential upside of 71.7% from the stock’s price of N27.90 as at when the report was prepared.

Analysts at SBG securities have a Hold recommendation on the stock. They have a 12 month target price of N36 per share. This represents a potential upside of 12.5% from the stock’s price of N32 as at when the report was prepared. 

Our View  

Unilever Nigeria Plc is a SELL in Nairametrics opinion. The company’s half year 2019 results show that the company’s results may come in much lower than the 2018 full year.  

Trade receivables for the firm also spiked from N18.2 billion in H1 2018 to N24.2 billion in H1 2019, up 32.9% year on year. This could indicate the firm may be having difficulties collecting receivables.

The increase in trade receivables also came in much higher, than sales which were up 12.9% year on year to N48.1 billion in H1 2019.

While the same trend was noticed in Nestle Nigeria Plc (H1 revenues up 4.%, but receivables up 21.8%), Unilever was way higher. Nestle also had an increase in both topline and bottomline.

 Red Star Express: SELL  

Recent Results: Results for the first quarter ended June 2019 show that turnover increased from N2.3 billion in 2018 to N2.5 billion in 2019. Profit before tax increased from N164 million in 2018 to N198 million in 2019. Profit after tax also rose from N111 million in 2018 to N134 million in 2019.  

Current Share Price: N4.66 

Price to Earnings Ratio: 5.11X

Price to Book Ratio: 0.86    

Year to Date Return: 1%  

One Year Return: -19.56%  

External Views 

None 

Our View 

Red Star Express is a SELL in Nairametrics view. This week, the company had through its Stockbroker, APT Securities and Funds Limited, submitted an application to The Nigerian Stock Exchange for the approval and listing of a Rights Issue of                     294,748,380 ordinary shares of fifty kobo each at N4.50 per share, on the basis of 1 new share, for every two held.  

An impending rights issue will mean more shares in issue, and would lead to a lower share price.  

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

1 COMMENT

  1. Enugu state government is learning from anambra. What we have here in anambra is a group of charlatans in government extorting people daily and going to America to buy choice house with it. All the roads are bad, no functional schools, no hospital, no water,and no light.

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