Zenith Bank, MTN Nigeria and AXA Mansard Lead This Week’s Stock Picks

Nigerian stocks regained some ground last week, with market capitalization rising 0.8% after two consecutive weeks of losses. Stronger buying pressure and a sharp performance from the oil and gas index helped lift the market, with Seplat Energy providing much of the sector’s momentum.

The reversal marked a change from the previous week, when oil and gas had performed worst among Nigeria’s five sector indices. Premium Times links the renewed interest in energy shares to the sector’s outlook and higher crude prices as the US-Israel war against Iran continues. It also points to revenue growth and, in some cases, higher half-year profits reported by oil companies in Nigeria and elsewhere.

The publication expects two recent developments to support the market further: FTSE Russell’s reclassification of Nigeria as a frontier market and Moody’s move to raise the country’s outlook from stable to positive. Against that backdrop, it presents five companies as stocks with what it describes as sound or attractive fundamentals.

Zenith Bank tops the list because it trades below its intrinsic value, with a net profit ratio of 21.8%, a price-to-earnings ratio of 4.8 times and a 14-day relative strength index of 55.2. MTN Nigeria follows with a 21.9% net profit ratio, an 11.6-times price-to-earnings ratio and an RSI of 28.8. AXA Mansard Insurance has a 3.4% net profit ratio, a 29.8-times price-to-earnings ratio and an RSI of 49.6.

Unilever Nigeria is included with a 14.1% net profit ratio, a 19.6-times price-to-earnings ratio and an RSI of 30.5. Jaiz Bank’s figures are a 28.5% net profit ratio, an 11.6 price-to-earnings ratio and an RSI of 39.2. Premium Times stresses that the selection is not a buy, sell or hold recommendation and advises readers to consult a financial adviser before making investment decisions.