Home Investment Buy/Sell/Hold Picks for the trading week ending 29th of June 2018

Buy/Sell/Hold Picks for the trading week ending 29th of June 2018

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Stocks on our Buy/Sell/Hold list are picked from the gainers and losers from the previous week. Here are our stock picks for this week’s trading session.

C and I leasing Plc: SELL

C and I Leasing was incorporated on 28th December 1990 and commenced business in June 1991. The company is in equipment leasing, car and marine rentals, as well as fleet management. It was listed on the Nigerian Stock Exchange in December 1997.

Latest results: For the first quarter ended March 2018, gross earnings increased from N6 billion in 2017 to N6.4 billion in 2018. Profit before tax increased from N305 million in 2017 to N405 million in 2018.

Pricing

Current Share Price:  N2.03

Price Earnings Ratio:  2.66X

Price to Book Ratio: 0.35

YTD Return: 57.36%

One Year Return: 222.22%

Latest Information: The company recently announced that its N7 billion bond issue was oversubscribed. Proceeds will be used for working capital and paying down existing debt.

External View: None

Our View: C and I Leasing yesterday scaled to a new year high of N2.03. The stock is a SELL in Nairametrics’ opinion.  

N.E.M. Insurance: HOLD

N.E.M. insurance was incorporated in 1970, and listed on the Nigerian Stock Exchange in 1989 following its privatization. 

Latest results: Q1 2018 results show that gross premium written increased from N5.1 billion in 2017 to N5.6 billion in 2018.

Pricing

Current Share Price: N3.04

Price to Earnings Ratio: 5.74X

Price to Book Ratio: 1.64

YTD Return: 83.13%

One Year Return: 240.98%

Latest Information: The company, at its Annual General Meeting, held last week, obtained the approval of shareholders to raise N2.64 billion through a private placement. The company will issue about 1,056,000,000 ordinary shares of 50 kobo each, at N2.50.

The move, however, may be opposed by some key shareholders who see it as a means of edging them out.

External View: None

Our View: N.E.M. Insurance is a HOLD in Nairametrics’ view. The stock could witness a slight uptick as key shareholders may decide to up their stakes.

Honeywell Flour Mills: BUY

Honeywell Flour Mills was registered as Gateway Honeywell Flour Mills Limited on 21st of June, 1983. The company changed its name to Honeywell Flour Mills in 1995, became a public limited liability company in 2008, and was listed on the Nigerian Stock Exchange in 2009.

Honeywell Flour Mills is into the manufacture and marketing of wheat-based products including flour, semolina, whole wheat meal, noodles, and pasta.

Latest Results: Results for the 9 months ended December 2017, show that the company made N54 billion as revenue, compared to N37 billion in 2016. Profit before tax increased from N1.6 billion in 2016 to N3.4 billion in 2017. Profit after tax jumped sharply from N1.3 billion in 2016 to N2.7 billion in 2018.

Pricing

Current Share Price: N2.14

Price Earnings Ratio: 3.68X

Price to Book Ratio: 0.32

YTD Return: 1.90%

One Year Return: 18.51%

External View: None

Our View: Honeywell Flour Mills is a BUY in our opinion. From precedence, the company could release its full-year result next month. The company’s Q3 2017 results have shown massive improvement, indicating the possibility of a bumper dividend package.

The stock is also trading at 2.3% above its year low of N2.09, leaving room for some upside.

Seplat Petroleum Development Company: BUY

Latest Results: Results for the first quarter ended March 2018 show revenue increased from N14.4 billion in 2017 to N55.2 billion in 2018. Seplat made a profit before tax of N17.9 billion in 2918 as against a loss before tax of N5.6  billion in 2017. Profit after tax stood at N6.2 billion as against a loss of N5.8 billion in 2017.

Pricing

Current Share Price: N650.80

Price to Earnings Ratio: 3.35x

Price to Book Ratio: 0.70

Year to Date: 3.93%

One Year Return: 44.96%

Latest Information: The company, in a notice sent to the Nigerian Stock Exchange (NSE) last week, informed the investing public that its board would be meeting on the 20th of July 2018, to consider its Half Year 2017 results.

External View: Analysts at FBNQuest have an overperform rating on the stock with a target price of N971.

Our View: Despite the slight dip in crude oil prices, Seplat is a BUY in Nairametrics’ view. The company has paid down its debt and returned to profitability.

In addition, it also paid an interim dividend for the 2018 financial year. Barring any militant attack or prolonged downtime at the Forcados pipeline, the company should have a decent full year 2018 performance.

The stock is currently trading 3.8% above its year low of N626.22, giving room for some upside.


This is not a buy sell or hold recommendation. Remember to consult a competent financial analyst or stockbroker if you need help with your investment decisions.

 




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