Nigerian equities closed last week on a positive note as renewed investors’ interest in industrial goods stocks lifted the market, pushing the benchmark index up by 0.7 per cent. The development has raised the year-to-date return of the Nigerian stock market to 27.5 per cent.
Market watchers say the momentum reflects sustained investor confidence as the first quarter of the year gradually draws to a close. Analysts note that attention is now shifting to the anticipated release of 2025 audited financial statements by major banks, which could provide further direction for the market in the near term.
Analysts at Meristem Securities said dividend declarations from companies that have recently published their full-year results are likely to continue attracting income-focused investors.
“Dividend declarations from companies that recently released their full-year results could continue to attract income-seeking investors, providing support for some counters,” the firm said in its weekly outlook.
The analysts also noted that sentiment within the oil and gas sector could remain positive following the recent increase in global crude oil prices, largely influenced by ongoing geopolitical tensions.
Against this backdrop, market analysts have highlighted a number of stocks with strong fundamentals that investors may consider as they position their portfolios.
The selected equities, identified through analytical market monitoring, are expected to deliver moderate price appreciation over time based on their underlying performance indicators.
However, analysts cautioned that the selection should serve only as a guide for investors and not as a direct buy, sell or hold recommendation, advising investors to consult financial advisers before making investment decisions.
Among the stocks identified is NEM Insurance, which tops the list on account of its strong fundamentals and for currently trading below its intrinsic value. The company has a net profit ratio (NPR) of 14.2 per cent, a price-to-earnings (PE) ratio of 7.1 times, and a relative strength index (RSI) of 55.7.
Fidelity Bank also features on the list due to its robust fundamentals and valuation below its underlying worth. The lender recorded an NPR of 19.1 per cent, a PE ratio of 3.6 times, and an RSI of 43.1.
Africa Prudential was also selected for its strong performance indicators, with an NPR of 33.8 per cent, a PE ratio of 19.4 times, and an RSI of 46.8.
Cornerstone Insurance equally made the list based on its fundamentals. The underwriting firm posted an NPR of 14 per cent, a PE ratio of 11.9 times, and an RSI of 39.4.
BUA Foods was another stock highlighted by analysts, supported by its strong financial metrics. The company recorded an NPR of 28.1 per cent, a PE ratio of 28.4 times, and an RSI of 47.7.
Market analysts say while the selected stocks show strong indicators, investors should continue to monitor broader economic and corporate developments that could influence market performance in the coming weeks.
