Futureview Stockbrokers just recommended the following stocks picks for the week ended June 27th 2014. The report includes their valuations as well as reason for being bullish about the stock. The research is based mostly on technical analysis.
NASCON
BULL POINTS
The current price bears a current dividend yield of 8.42%, well above the market average of 3.88% and industry average of 3.31%. At the last AGM, the Chairman of the company, Alhaji Aliko Dangote announced the intention to effect a name change to “NASCON INDUSTRIES Plc” following its plan to expand beyond salt producing into other businesses including – seasoning (DAN-Q cubes), vegetable oil refining and tomato paste packaging. We believe this will help to shore up the top and bottom lines of the company.
From our technical analysis (Figure 1), NASCON is currently 8.2% below its 200-period moving average and is in a downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of NASCON at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on NASCON and have had this outlook for the last 8 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence. Hence, our entry price is fixed below the current price of N11.50, bargain hunters are likely to start mopping up in the near term.
GTB
BULL POINTS
- GUARANTY boasts of strong brand equity, customer loyalty and attractive cost-to-income ratios. Reputed to offer both interim and attractive final dividends.
- We project final earnings per share value of N3.13 for the 2014 financial year. If the banks maintains its 58.33% dividend payout ratio, we expect a total cash dividend of between N1.70 – N1.75 per share, generating a forecast dividend yield of 6.23%, against the industry average of 5.24%.
- Technically (Figure 2), GUARANTY is currently 8.4% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect moderate flows of volume into GUARANTY (mildly bullish). Our trend forecasting oscillators are currently bullish on GUARANTY.
DANGOTE SUGAR
BULL POINTS
- Q1′ 2014 financials for the sugar making subsidiary of Dangote Industries show a growth of 8.8% in PAT from N3.453billion to N3.76 billion year-on-year, despite the decrease of 6.4% recorded in its turnover which fell to N25.88billion in Q1’2014 from N27.64billion in Q1’2013. Audited financials for the 2013 financial year show a drop of 4.12% in turnover to N102.47billion and a growth of 26.11% in PAT to N13.54billion. Dangote Sugar boasts of sound financials and increased cost management despite a reduced turnover largely due to a drop in prices. Trailing dividend yield stands at 6.45%, this beats the market and food and beverages sector averages of 3.88% and 3.13% respectively.
- DANGSUGAR (Figure 3) is currently 11.4% below its 200-period moving average, volume indicators reflect volume flowing into and out of DANGSUGAR at a relatively equal pace (neutral). We however recommend DANGSUGAR for a buy at its current price as increased bargaining and subsequent earnings releases will realize our fair value estimate of N10.98, which represents a 12.80% upside, this grows to 19.25% in total returns when we consider the dividend yield of 6.45%.
UACN
BULL POINTS
- UAC of Nigeria Plc (NSE: UACN) reported improved financials for the 2013 financial period with turnover growing by 13.04% to N78.71billion from N69.63billion in 2012. PAT grew by over 140% to N9.95bilion in 2013 from N4.11billion in 2012. We project a final EPS of N5.52 in 2014, a growth of 48.7% from 2013. The company has subsidiaries including CAP Plc, UAC Properties Plc, Grand Cereals & Oil Mills, Portland Paints Manufacturing Plc, Livestock Feeds Plc, MDS Logistics Limited, and UAC Restaurants, owners of Mr. Biggs quick service restaurants (QSR).
- From our technical analysis (Figure 4), UACN is currently 3.9% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume out of UACN (mildly bearish). Our trend forecasting oscillators are currently bullish on UACN and have had this outlook for the last 35 periods.
UPDC
BULL POINTS
- UAC Property Development Plc is the real estate subsidiary of the UAC of Nigeria Plc conglomerate. The company has maintained consistent dividend payments for the last five years, therefore, the stock makes for a good investment for income seeking investors. In the just concluded financial year UAC-PROP paid a 70kobo per share dividends along with bonus dividend of 1 new share for every 4 previously held. Trailing EPS for the 2014 stands at N2.40,
- Technically, UAC-PROP is currently 6.5% below its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of UAC-PROP at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on UAC-PROP.
SKYE BANK PLC
BULL POINTS
- SKYEBANK is currently 15.1% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of SKYEBANK at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on SKYEBANK and have had this outlook for the last 26 periods.
- Trailing dividend yield for the 2nd tier bank stands at 8.98%
You can get the full report here and please read it as it contains a a lot more information.
