Earnings Season Momentum: Access, AIICO & Transcorp Lead This Week’s Strategic Stock Picks
Nigerian equities extended their rally last week as:
• The main equity index surged 6.2%
• Oil & Gas stocks gained strong traction
• Industrial goods counters attracted fresh buying interest
• Overall market sentiment improved significantly
With FY 2025 earnings reports still rolling in — especially from major banks and large corporates — analysts expect fundamentals and dividend expectations to shape near-term direction.
Meristem Securities noted that:
Ongoing earnings releases and dividend expectations should continue to anchor sentiment, particularly in stocks with strong fundamentals.
Let’s break down the highlighted picks
This Week’s Strategic Stock Picks
(This is not a buy/sell recommendation — but a structured investment guide.)
Access Holdings Plc
Why It’s Selected:
• Trading below intrinsic value
• Strong underlying fundamentals
Key Metrics:
• Net Profit Ratio (NPR): 13.8%
• Price-to-Earnings (P/E): 1.8x
• Relative Strength Index (RSI): 71.8
What It Signals:
• A P/E of 1.8x suggests potential undervaluation relative to earnings.
• RSI above 70 indicates strong buying momentum (approaching overbought territory).
• Positioned well ahead of dividend expectations.
Interpretation: Value + momentum combination.
AIICO Insurance Plc
Why It’s Selected:
• Improving and robust fundamentals
Key Metrics:
• NPR: 8.1%
• P/E: 8.4x
• RSI: 52.6
What It Signals:
• Balanced valuation.
• RSI around 50 suggests neutral momentum — room for upward movement.
• Insurance sector could benefit from renewed investor rotation.
Interpretation: Fundamentally stable with technical room to climb.
Transcorp Plc
Why It’s Selected:
• Trading below intrinsic value
Key Metrics:
• NPR: 22.2%
• P/E: 8.4x
• RSI: 71.5
What It Signals:
• Strong profitability (high NPR).
• Attractive earnings multiple.
• RSI above 70 reflects strong bullish momentum.
Interpretation: Profitability + momentum-driven interest.
United Bank for Africa Plc (UBA)
Why It’s Selected:
• Undervalued relative to intrinsic value
Key Metrics:
• NPR: 23.8%
• P/E: 2.4x
• RSI: 73.7
What It Signals:
• Extremely low P/E ratio.
• Strong profitability.
• High RSI indicates strong demand.
Interpretation: Deep value with aggressive buying pressure.
United Capital Plc
Why It’s Selected:
• Strong fundamentals
Key Metrics:
• NPR: 51.6%
• P/E: 12.8x
• RSI: 67.2
What It Signals:
• Exceptionally high profitability margin.
• Higher P/E reflects premium valuation.
• RSI below 70 suggests continued upside potential.
Interpretation: Premium-quality earnings play.
Market Themes Emerging
Earnings Season Is Driving Sentiment
Investors are positioning ahead of:
• Full-year results
• Dividend declarations
• Guidance outlook
Value + Dividend Narrative
Low P/E stocks like:
• Access Holdings
• UBA
Are attracting accumulation based on dividend expectations and intrinsic value gaps.
Financial Sector Dominance
Notice something?
4 out of 5 picks are financial services players.
That suggests:
• Strong confidence in banking & financial earnings
• Anticipation of attractive dividend yields
• Rotation into fundamentally strong counters
InvestingPort Insight
This week’s theme is clear:
Profitability + Undervaluation + Dividend Expectation = Momentum
However, investors should also watch:
• RSI levels approaching overbought zones
• Broader market sustainability after a 6.2% rally
• Liquidity trends in oil & industrial names
Nigerian equities extended their rally last week as:
• The main equity index surged 6.2%
• Oil & Gas stocks gained strong traction
• Industrial goods counters attracted fresh buying interest
• Overall market sentiment improved significantly
With FY 2025 earnings reports still rolling in — especially from major banks and large corporates — analysts expect fundamentals and dividend expectations to shape near-term direction.
Meristem Securities noted that:
Ongoing earnings releases and dividend expectations should continue to anchor sentiment, particularly in stocks with strong fundamentals.
Let’s break down the highlighted picks
This Week’s Strategic Stock Picks
(This is not a buy/sell recommendation — but a structured investment guide.)
Access Holdings PlcWhy It’s Selected:
• Trading below intrinsic value
• Strong underlying fundamentals
Key Metrics:
• Net Profit Ratio (NPR): 13.8%
• Price-to-Earnings (P/E): 1.8x
• Relative Strength Index (RSI): 71.8
What It Signals:
• A P/E of 1.8x suggests potential undervaluation relative to earnings.
• RSI above 70 indicates strong buying momentum (approaching overbought territory).
• Positioned well ahead of dividend expectations.
Interpretation: Value + momentum combination.
AIICO Insurance PlcWhy It’s Selected:
• Improving and robust fundamentals
Key Metrics:
• NPR: 8.1%
• P/E: 8.4x
• RSI: 52.6
What It Signals:
• Balanced valuation.
• RSI around 50 suggests neutral momentum — room for upward movement.
• Insurance sector could benefit from renewed investor rotation.
Interpretation: Fundamentally stable with technical room to climb.
Transcorp PlcWhy It’s Selected:
• Trading below intrinsic value
Key Metrics:
• NPR: 22.2%
• P/E: 8.4x
• RSI: 71.5
What It Signals:
• Strong profitability (high NPR).
• Attractive earnings multiple.
• RSI above 70 reflects strong bullish momentum.
Interpretation: Profitability + momentum-driven interest.
United Bank for Africa Plc (UBA)Why It’s Selected:
• Undervalued relative to intrinsic value
Key Metrics:
• NPR: 23.8%
• P/E: 2.4x
• RSI: 73.7
What It Signals:
• Extremely low P/E ratio.
• Strong profitability.
• High RSI indicates strong demand.
Interpretation: Deep value with aggressive buying pressure.
United Capital PlcWhy It’s Selected:
• Strong fundamentals
Key Metrics:
• NPR: 51.6%
• P/E: 12.8x
• RSI: 67.2
What It Signals:
• Exceptionally high profitability margin.
• Higher P/E reflects premium valuation.
• RSI below 70 suggests continued upside potential.
Interpretation: Premium-quality earnings play.
Market Themes Emerging
Earnings Season Is Driving SentimentInvestors are positioning ahead of:
• Full-year results
• Dividend declarations
• Guidance outlook
Value + Dividend NarrativeLow P/E stocks like:
• Access Holdings
• UBA
Are attracting accumulation based on dividend expectations and intrinsic value gaps.
Financial Sector DominanceNotice something?
4 out of 5 picks are financial services players.
That suggests:
• Strong confidence in banking & financial earnings
• Anticipation of attractive dividend yields
• Rotation into fundamentally strong counters
InvestingPort Insight
This week’s theme is clear:
Profitability + Undervaluation + Dividend Expectation = Momentum
However, investors should also watch:
• RSI levels approaching overbought zones
• Broader market sustainability after a 6.2% rally
• Liquidity trends in oil & industrial names