Sovereign Trust Insurance, UBA, NPF Microfinance Bank top stock picks this week
Last week, the Nigerian stock market rose by 2.6%, with banks and insurance companies leading the charge.
Investment experts at United Capital believe many investors are now positioning themselves early for the second-quarter (Q2) earnings season, which typically begins in June. Investors are likely to prefer companies that:
• Have benefited from exchange rate (FX) gains
• Know how to control costs
• Show steady growth
• Are expected to pay good interim dividends
However, some stocks that are close to their highest price in the past year may face profit-taking this week (investors selling to cash out gains).
Top Stock Picks of the Week
⚠️ This is not financial advice. It’s just a guide. Speak with your financial advisor before making decisions.
These stocks were selected based on strong company fundamentals and the fact that they are currently undervalued, meaning their market price is lower than what the company is truly worth.
1. Sovereign Trust Insurance
• Trading below its actual worth and asset value
• Price-to-Book (PB) ratio: 0.9x (less than 1 is often seen as undervalued)
• Price-to-Earnings (PE) ratio: 4.6x
• Relative Strength Index (RSI): 62.1 (suggests moderate buying momentum)
2. United Bank for Africa (UBA)
• Also undervalued compared to its actual financial strength
• PB ratio: 0.4x
• PE ratio: 1.6x (very low, could mean it’s a bargain)
• RSI: 49.9 (neutral zone)
3. NPF Microfinance Bank
• Considered cheaper than its real value
• PB ratio: 1.1x
• PE ratio: 6.3x
• RSI: 55.9
4. NEM Insurance
• Valued below its underlying worth
• PB ratio: 0.9x
• PE ratio: 2.3x
• RSI: 67.2 (nearing overbought territory)
5. Japaul Gold
• Trading below value
• PB ratio: 1.5x
• PE ratio: 6.6x
• RSI: 48.1 (neutral)
6. Custodian Investment
• Considered undervalued
• PB ratio: 0.9x
• PE ratio: 2.5x
• RSI: 70.9 (could be nearing overbought, so watch closely)
Takeaway for Everyday Investors
This week’s picks favor cheap, fundamentally strong stocks in insurance, banking, and microfinance. Investors looking for opportunities ahead of Q2 earnings might find value in these names — but remember, prices close to 52-week highs might see temporary pullbacks as traders lock in profits.
If you’re planning to invest, consult your financial advisor to decide if these stocks align with your personal financial goals.
Last week, the Nigerian stock market rose by 2.6%, with banks and insurance companies leading the charge.
Investment experts at United Capital believe many investors are now positioning themselves early for the second-quarter (Q2) earnings season, which typically begins in June. Investors are likely to prefer companies that:
• Have benefited from exchange rate (FX) gains
• Know how to control costs
• Show steady growth
• Are expected to pay good interim dividends
However, some stocks that are close to their highest price in the past year may face profit-taking this week (investors selling to cash out gains).
Top Stock Picks of the Week
⚠️ This is not financial advice. It’s just a guide. Speak with your financial advisor before making decisions.
These stocks were selected based on strong company fundamentals and the fact that they are currently undervalued, meaning their market price is lower than what the company is truly worth.
1. Sovereign Trust Insurance
• Trading below its actual worth and asset value
• Price-to-Book (PB) ratio: 0.9x (less than 1 is often seen as undervalued)
• Price-to-Earnings (PE) ratio: 4.6x
• Relative Strength Index (RSI): 62.1 (suggests moderate buying momentum)
2. United Bank for Africa (UBA)
• Also undervalued compared to its actual financial strength
• PB ratio: 0.4x
• PE ratio: 1.6x (very low, could mean it’s a bargain)
• RSI: 49.9 (neutral zone)
3. NPF Microfinance Bank
• Considered cheaper than its real value
• PB ratio: 1.1x
• PE ratio: 6.3x
• RSI: 55.9
4. NEM Insurance
• Valued below its underlying worth
• PB ratio: 0.9x
• PE ratio: 2.3x
• RSI: 67.2 (nearing overbought territory)
5. Japaul Gold
• Trading below value
• PB ratio: 1.5x
• PE ratio: 6.6x
• RSI: 48.1 (neutral)
6. Custodian Investment
• Considered undervalued
• PB ratio: 0.9x
• PE ratio: 2.5x
• RSI: 70.9 (could be nearing overbought, so watch closely)
Takeaway for Everyday Investors
This week’s picks favor cheap, fundamentally strong stocks in insurance, banking, and microfinance. Investors looking for opportunities ahead of Q2 earnings might find value in these names — but remember, prices close to 52-week highs might see temporary pullbacks as traders lock in profits.
If you’re planning to invest, consult your financial advisor to decide if these stocks align with your personal financial goals.