UBA, NEM Insurance, and NNFM Shine as Top Stock Picks Amid Market Rally
Detailed Breakdown:
The Nigerian stock market wrapped up last week on a strong note, advancing by 4.5%, largely fueled by renewed buying interest in industrial goods and oil & gas stocks. This surge has pushed the year-to-date (YTD) return of the market to an impressive 51.2%, reinforcing investors’ confidence as the third-quarter earnings season kicks in.
According to analysts at Meristem Securities, investor sentiment this week will likely be shaped by the release of nine-month (9M:2025) earnings reports and possible dividend declarations — both of which tend to attract dividend-seeking investors eager to take strategic positions.
Adding to the positive sentiment is the newly released inflation data, which showed a decline to 18.02% in September from 20.12% in August. This decline has fueled market expectations of another interest rate cut, a move that could further enhance the attractiveness of equities relative to fixed-income instruments.
In light of these developments, Premium Times analysts have highlighted five stocks with strong fundamentals and potential for price appreciation in the coming weeks. While this isn’t a buy, sell, or hold recommendation, it serves as an investment guide for investors seeking well-positioned equities.
Top Stock Picks for the Week
1. United Bank for Africa (UBA)
UBA leads the list this week, trading below its intrinsic value. The bank’s net profit ratio (NPR) stands at 22.3%, reflecting strong profitability, while its price-to-earnings (P/E) ratio is a modest 2x, indicating that the stock remains undervalued. The relative strength index (RSI) of 27 also suggests the stock is nearing oversold territory, presenting a potential entry opportunity for investors.
2. NEM Insurance
NEM Insurance earns a spot for its solid fundamentals and undervalued position in the market. The company boasts a 25.9% NPR and a P/E ratio of 4.1x, making it an appealing option for investors seeking quality in the insurance sector. Its RSI of 54.9 shows balanced momentum, leaving room for upward movement.
3. Northern Nigerian Flour Mills (NNFM)
NNFM is recognized for its fairly strong fundamentals. With a net profit ratio of 4.3% and a P/E ratio of 9.9x, the company demonstrates steady performance in the consumer goods sector. However, its RSI of 96.8 indicates the stock might be overbought, signaling that investors should watch for possible pullbacks.
4. AIICO Insurance
AIICO Insurance joins the lineup for maintaining fair fundamentals with a net profit ratio of 6.3% and a P/E ratio of 10x. The RSI of 42.8 suggests moderate momentum, leaving room for potential growth as earnings season unfolds.
5. Mutual Benefits Assurance
Mutual Benefits rounds off the list with sound fundamentals that make it one to watch. The insurer’s NPR stands at 13.1%, while the P/E ratio of 4.3x indicates attractive valuation. Its RSI of 29.6 suggests the stock could be undervalued and may present a buying opportunity if momentum strengthens.
Market Outlook:
With earnings season in full swing, analysts expect heightened trading activity in the coming weeks. Declining inflation, the potential for lower interest rates, and a solid run in industrial and energy stocks could further boost investor confidence and sustain the market rally.
Disclaimer: This is not a buy, sell, or hold recommendation but an investment guide. Investors are advised to consult their financial advisors before making any investment decisions.
Detailed Breakdown:
The Nigerian stock market wrapped up last week on a strong note, advancing by 4.5%, largely fueled by renewed buying interest in industrial goods and oil & gas stocks. This surge has pushed the year-to-date (YTD) return of the market to an impressive 51.2%, reinforcing investors’ confidence as the third-quarter earnings season kicks in.
According to analysts at Meristem Securities, investor sentiment this week will likely be shaped by the release of nine-month (9M:2025) earnings reports and possible dividend declarations — both of which tend to attract dividend-seeking investors eager to take strategic positions.
Adding to the positive sentiment is the newly released inflation data, which showed a decline to 18.02% in September from 20.12% in August. This decline has fueled market expectations of another interest rate cut, a move that could further enhance the attractiveness of equities relative to fixed-income instruments.
In light of these developments, Premium Times analysts have highlighted five stocks with strong fundamentals and potential for price appreciation in the coming weeks. While this isn’t a buy, sell, or hold recommendation, it serves as an investment guide for investors seeking well-positioned equities.
Top Stock Picks for the Week
1. United Bank for Africa (UBA)
UBA leads the list this week, trading below its intrinsic value. The bank’s net profit ratio (NPR) stands at 22.3%, reflecting strong profitability, while its price-to-earnings (P/E) ratio is a modest 2x, indicating that the stock remains undervalued. The relative strength index (RSI) of 27 also suggests the stock is nearing oversold territory, presenting a potential entry opportunity for investors.
2. NEM Insurance
NEM Insurance earns a spot for its solid fundamentals and undervalued position in the market. The company boasts a 25.9% NPR and a P/E ratio of 4.1x, making it an appealing option for investors seeking quality in the insurance sector. Its RSI of 54.9 shows balanced momentum, leaving room for upward movement.
3. Northern Nigerian Flour Mills (NNFM)
NNFM is recognized for its fairly strong fundamentals. With a net profit ratio of 4.3% and a P/E ratio of 9.9x, the company demonstrates steady performance in the consumer goods sector. However, its RSI of 96.8 indicates the stock might be overbought, signaling that investors should watch for possible pullbacks.
4. AIICO Insurance
AIICO Insurance joins the lineup for maintaining fair fundamentals with a net profit ratio of 6.3% and a P/E ratio of 10x. The RSI of 42.8 suggests moderate momentum, leaving room for potential growth as earnings season unfolds.
5. Mutual Benefits Assurance
Mutual Benefits rounds off the list with sound fundamentals that make it one to watch. The insurer’s NPR stands at 13.1%, while the P/E ratio of 4.3x indicates attractive valuation. Its RSI of 29.6 suggests the stock could be undervalued and may present a buying opportunity if momentum strengthens.
Market Outlook:
With earnings season in full swing, analysts expect heightened trading activity in the coming weeks. Declining inflation, the potential for lower interest rates, and a solid run in industrial and energy stocks could further boost investor confidence and sustain the market rally.
Disclaimer: This is not a buy, sell, or hold recommendation but an investment guide. Investors are advised to consult their financial advisors before making any investment decisions.