Best performing stocks in Nigeria (YtD May 2023)

The Nigerian stock market has shown remarkable resilience in the face of a challenging macroeconomic environment.

Despite the high inflation rate of 22.22%, the political uncertainty ahead of the presidential election, and the scarcity of foreign exchange that hampered business activities in the first quarter of 2023, the All Share Index (ASI) has gained 8.62% year-to-date (YTD) as of May 31st, 2023.

Some stocks have performed exceptionally well, posting triple-digit returns in the first five months of the year. These are mainly companies that have strong fundamentals, diversified revenue streams, and competitive advantages in their respective sectors.

These stocks have delivered impressive returns despite a difficult Q1 2023, marked by elections and naira scarcity, which affected business performance.

The top performers encompass a range of sectors, indicating diverse opportunities for investors. Transnational Corporation of Nigeria PLC, with an impressive return of 173%, has exhibited exceptional growth.

Conoil PLC, a major player in the petroleum sector, has delivered substantial returns of 119%. Nigerian Aviation Handling Company PLC and Geregu Power PLC have also excelled, posting returns of 114% and 107%, respectively.

In the food and consumer goods sector, BUA Foods PLC, Cadbury Nigeria PLC, and PZ Cussons Nigeria PLC have performed well, with returns of 100%, 50%, and 49%, respectively. Berger Paints PLC, Axamansard Insurance PLC, and Sterling Bank PLC have also showcased strong performance, delivering returns of 68%, 63%, and 46%, respectively.

These exceptional returns amid the challenging Q1 2023 and high inflation rates highlight the resilience and growth potential of these stocks. Investors should closely monitor the market dynamics and the impact of economic factors to make informed investment decisions as the Nigerian economy navigates through these challenging times.

These are the top 5 performers in 2023 YTD May 2023.

BUA Foods PLC +100%

BUA Foods PLC has delivered a noteworthy YTD return of 100%. As a leading player in the food and consumer goods sector, BUA Foods has successfully navigated the challenging business environment, including the impact of high inflation rates and the difficult Q1 2023.

The company’s diverse product portfolio, strong distribution network, and focus on quality and innovation have contributed to its impressive performance.
BUA Foods’ ability to meet consumer demand and adapt to changing market dynamics has solidified its position as a key player in the Nigerian food industry.
No surprises, the company reported one of the most impressive results on the Exchange in 2022 with a profit after tax of N91.3 billion up 30.9%. It followed this with another impressive Q1 results of N40.4 billion

Geregu Power PLC +107%

Geregu Power PLC has witnessed significant growth with a YTD return of 107%. The company operates in the power sector and is involved in electricity generation and distribution.

Geregu Power’s impressive performance can be attributed to its contribution to addressing Nigeria’s power deficit and its strategic partnerships.

Despite the challenges faced by the industry, Geregu Power’s strong performance reflects the company’s ability to attract investor confidence thus rewarding the stock with 107% growth.
For example, Afrexim Bank’s Feda acquired a 5% stake in the power company expressing confidence in the stock’s ability to continue to deliver impressive returns.
The company also paid its shareholders a massive N20 billion dividend in 2022, its very first year of being listed on the NGX. Geregu Power Plc said it has projected to generate N18.17 billion in revenue for the second quarter ending June 2023.
The power firm is also projected to rake in N8.79 billion in gross profits. Targets for a profit before and after tax were put at N6.94 billion and N4.84 billion, respectively.

Nigerian Aviation Handling Company PLC

Nigerian Aviation Handling Company (NAHCO) PLC has posted a remarkable YTD return of 114%. NAHCO’s strong performance can be attributed to its essential role in the aviation industry, providing a range of ground handling services to airlines and related businesses.

Despite the challenges faced by the aviation sector, NAHCO has shown resilience and adaptability in managing its operations. confidence.
The company also reported a profit after tax of N2.67 billion 240% higher than the N771 million reported a year earlier.
The company kept up with an impressive 100% increase in profit after tax in the first quarter of the year.

Conoil PLC +119%

Conoil PLC, a major player in the petroleum sector, has demonstrated its resilience by delivering an impressive YTD return of 119%.

Despite the challenging Q1 2023 and the impact of high inflation rates, Conoil has successfully capitalized on favorable pricing and market dynamics in the petroleum industry.
Conoil’s performance is likely due to its impressive performance for the full year of December 2022 where it reported a profit after tax of N6.2 billion more than double the N3 billion reported a year earlier.

Transnational Corporation of Nigeria PLC +173%

Transnational Corporation of Nigeria (Transcorp) has emerged as the top-performing stock with a remarkable YTD return of 173%.

The company has showcased its ability to navigate the challenging business environment, including the difficult Q1 2023 marked by elections and naira scarcity.
Transcorp’s 173% return is largely associated with Mr. Otedola’s announcement that he had acquired a 5% plus stake in Transcorp in April.
This led to a rally for the shares as investors sensed the announcement could lead to a share grab as fellow billionaire Tony Elumelu strengthens his grip on the conglomerate.
As expected the share price rallied to 173% within the period making the stock the top performing this year so far.

Finally,

The Nigerian stock market remains an attractive destination for both local and foreign investors who are looking for long-term returns and diversification opportunities.

The market offers a variety of stocks across different sectors and industries that can suit different risk appetites and investment objectives.
However, investors should also be aware of the inherent risks and volatility that come with investing in emerging markets such as Nigeria.

Here are the top 10 performers on the Nigerian Stock Exchange (NSE) as of May 31st, 2023: