Buy/Sell/Hold stocks are picked from the top gainers and losers of the prior week as well as various analyst reports.
FCMB: HOLD
Latest Results:
Results for the half year ended June 2018 show that gross earnings increased from N77.5 billion in 2017 to N83.9 billion in 2018. Profit before tax jumped from N3.8 billion in 2017 to N7.1 billion in 2018. Profit after tax also surged from N3.7 billion in 2017 to N5 billion in 2018.
Price Information
Current share price: N1.89
Price to earnings ratio: 2.96x
Price to book ratio: 0.2
Year to date return: 21.62%
One year return: 70.54%
External View
Analysts at United Capital have a BUY recommendation on the stock. They have a one-year target price of N2.70 per share. This represents a 47.5% upside from the stock’s price of N1.8, as at when the report was prepared.
Analysts at FBNQuest have a NEUTRAL recommendation on the stock. They have a target price of N3, which represents a 64.75% upside from the stock’s price of N1.8, as at when the report was prepared.
Our View
FCMB is a HOLD in Nairametrics’ opinion, despite its cheap valuation on a sectoral basis and compared to the average price-earnings ratio on the NSE. Year to date, the stock is up 21%. Investors are better off waiting for a decline in price before entering.
Sterling Bank: HOLD
Latest Results:
Results for the half year ended June 2018 show that interest income increased from N50 billion in 2017 to N62 billion in 2018. Profit before tax increased from N4.3 billion in 2017 to N6.3 billion in 2018. Profit after tax also jumped from N3.8 billion in 2017 to N6.2 billion in 2018.
Price Information
Current share Price: N1.37
Price to earnings ratio: 3.57X
Price to book ratio: 0.37
Year to date return: 26.85%
One year return: 32.1%
External View
Analysts at Afrinvest have a SELL recommendation on the stock. They have a one-year target of N0.80, 41.6% below the stock’s price of N1.37, as at when the report was prepared.
Our View
Sterling Bank is a HOLD in Nairametrics’ opinion. While the stock is trading within the same valuations as its peers and much lower than the average PE ratio on the NSE as a whole, it has not shown sufficient depreciation to warrant entry.
Red Star Express Plc: HOLD
Latest Results:
Results for the first quarter ended June 2018 show that turnover increased from N2 billion in 2017 to N2.3 billion in 2018. Profit before tax dropped from N176 million in 2017 to N164 million in 2018. Profit after tax dropped from N120 million in 2017 to N112 million in 2018.
Price Information
Current share price: N5.20
Price to earnings ratio: 8.81X
Price to book ratio: 1.21
Year to date return: 1.56%
One year return: 27.05%
External view: None
Our View
Red Star Express Plc is a HOLD in Nairametrics’ opinion. The stock is trading at 20% below its year high of N6.5. It is also trading at a much lower PE ratio compared to Trans Nation Wide Express, which is trading at 97 times earnings.
Investors are better off holding for a significant decline before taking positions.
