Weekly Stock Watchlist: Zenith, Fidelity, Living Trust Lead Picks Despite Market Pullback
The Nigerian stock market turned bearish last week after several weeks of positive momentum. The decline was mainly triggered by profit-taking in insurance stocks, which had earlier surged following new capital requirement rules for the sector.
Market Snapshot:
• The NGX Insurance Index fell by 8.2%, dragging the broader market to a 0.8% weekly decline.
• Analysts at Meristem Securities noted that with many stocks trading at their year highs, intermittent profit-taking could limit further gains.
• However, they also highlighted that financial services stocks are likely to remain active as investors await the release of tier-1 bank earnings and dividend declarations.
Stock Picks of the Week
Premium Times analysts highlighted five companies with strong fundamentals and growth potential. Here’s a closer look at the picks:
1️⃣ Zenith Bank Plc
• Reason for Pick: Undervalued, with strong dividend prospects for H1 2025.
• Net Profit Ratio (NPR): 32.8%
• Price-to-Earnings (P/E): 2.3x
• ⚖️ Relative Strength Index (RSI): 60.5 (healthy momentum).
2️⃣ Living Trust Mortgage Bank Plc
• Reason for Pick: Trading close to its 52-week low, making it an attractive entry point.
• NPR: 18.2%
• P/E: 26.3x
• ⚖️ RSI: 7.5 (deeply oversold, potential rebound play).
3️⃣ Fidelity Bank Plc
• Reason for Pick: Currently trading below its intrinsic value.
• NPR: 28.9%
• P/E: 2.3x
• ⚖️ RSI: 52.5 (neutral zone, room for upside).
4️⃣ Transnational Corporation (Transcorp)
• Reason for Pick: Valuation still below intrinsic value.
• NPR: 23.3%
• P/E: 7.4x
• ⚖️ RSI: 49.6 (stable, slightly undervalued).
5️⃣ Nigerian Aviation Handling Company (NAHCO)
• Reason for Pick: Strong operating fundamentals in a resilient sector.
• NPR: 27.5%
• P/E: 11.1x
• ⚖️ RSI: 51.9 (steady performance).
Key Takeaway
While profit-taking weighed on the market last week, investor attention is shifting to tier-1 banks like Zenith and GTCO, whose earnings and dividend announcements could shape market direction in the days ahead.
These highlighted stocks represent opportunities for investors to take strategic positions—but as always, consult your financial advisor before making decisions.
The Nigerian stock market turned bearish last week after several weeks of positive momentum. The decline was mainly triggered by profit-taking in insurance stocks, which had earlier surged following new capital requirement rules for the sector.
Market Snapshot:
• The NGX Insurance Index fell by 8.2%, dragging the broader market to a 0.8% weekly decline.
• Analysts at Meristem Securities noted that with many stocks trading at their year highs, intermittent profit-taking could limit further gains.
• However, they also highlighted that financial services stocks are likely to remain active as investors await the release of tier-1 bank earnings and dividend declarations.
Stock Picks of the Week
Premium Times analysts highlighted five companies with strong fundamentals and growth potential. Here’s a closer look at the picks:
1️⃣ Zenith Bank Plc
• Reason for Pick: Undervalued, with strong dividend prospects for H1 2025.
• Net Profit Ratio (NPR): 32.8%
• Price-to-Earnings (P/E): 2.3x
• ⚖️ Relative Strength Index (RSI): 60.5 (healthy momentum).
2️⃣ Living Trust Mortgage Bank Plc
• Reason for Pick: Trading close to its 52-week low, making it an attractive entry point.
• NPR: 18.2%
• P/E: 26.3x
• ⚖️ RSI: 7.5 (deeply oversold, potential rebound play).
3️⃣ Fidelity Bank Plc
• Reason for Pick: Currently trading below its intrinsic value.
• NPR: 28.9%
• P/E: 2.3x
• ⚖️ RSI: 52.5 (neutral zone, room for upside).
4️⃣ Transnational Corporation (Transcorp)
• Reason for Pick: Valuation still below intrinsic value.
• NPR: 23.3%
• P/E: 7.4x
• ⚖️ RSI: 49.6 (stable, slightly undervalued).
5️⃣ Nigerian Aviation Handling Company (NAHCO)
• Reason for Pick: Strong operating fundamentals in a resilient sector.
• NPR: 27.5%
• P/E: 11.1x
• ⚖️ RSI: 51.9 (steady performance).
Key Takeaway
While profit-taking weighed on the market last week, investor attention is shifting to tier-1 banks like Zenith and GTCO, whose earnings and dividend announcements could shape market direction in the days ahead.
These highlighted stocks represent opportunities for investors to take strategic positions—but as always, consult your financial advisor before making decisions.