BUA Foods Plc joined the SWOOTs after passing the N1 trillion threshold required to be classified as a member of the group.
After appreciating by 24.10% during the week, from N53.2 per share to N66.00 per share, BUA Foods had gained a total of N230.40 billion, taking the company’s market value to N1.19 trillion.
Up until the previous week, the most capitalized and only consumer goods stock in the classification was Nestle Nig Plc, valued at N1.23 trillion. However, at the end of trading session on Friday, BUA Foods attained that position to rank the most capitalized consumer goods stock on the Nigerian Exchange Limited (NGX).
On the other hand, Nestle Nig Plc recorded depreciation in share price from N1,556.50 to N1,435 per share, translating to a loss of N96.31 billion and taking the company’s market value to N1.14 trillion.
Hence, BUA Foods Plc currently surpasses Nestle Nig Plc by N50 billion in market value, displacing Nestle Nigeria Plc to be the most capitalized consumer goods company on the NGX.
Why investors are rallying on BUA Foods share
According to global market analyst, Opeyemi Dapo-Thomas, the company is witnessing immense rally as a result of its consolidation in the consumer goods market.
He said that the consumer goods company seems to be taking advantage of their customer segmentation and reducing costs which makes the stock of the company attractive to investors, hence, the rally around the shares of the newly listed company.
Another expert, Olumide Adesina, a financial analyst, is of the opinion that the shares of the company are currently at a premium and drawdowns would be expected in the nearest future.
He said, “We are expecting drawdowns at the end of Q1, we are going to see a lot, for the fact that we are entering into the election year and the fact that foreign investment in that sector is already drying up, and at some point, investors will have to sell”.
What you should know
- The shares of the Nestle Nig Plc have advanced by 1.41% from year-to-date, starting the year at N1,415 and currently traded at N1,435. However, the shares of the company have returned about 6.30% gains for investors who bought them at their 52-week low trading price of N1,350 per share.
- In contrast, BUA Foods has appreciated by 65% from the day of listing at N40.00, currently traded at N66.00. The shares of BUA Foods have returned 63.98% gains for investors who bought the stock at its 52-week low trading price of N40.35.
- The Consumer Goods Index, which tracks the daily and weekly performance of quoted FMCG companies, depreciated by 4.35%, from 584.13 points the previous day, to 558.72 points, at the end of the week’s trading session.