TOP 5 WEEKLY STOCK PICK FOR THE PERIOD 29/1/2018 – 2/2/2018 OUTLOOK & WATCH LIST – GTI SECURITIES

Week-on-week (WoW), the All-Share Index (ASI) shed a total of 1,319.07 absolute points, representing a decline of 2.93% to close at 43,773.76 points. This lead to a dip in the year-to-date’s (YTD) return at 14.46…

 

Thirty (30) equities appreciated in price during the period, lower than forty (40) recorded in the previous week. Forty-four (44) equities depreciated in price, higher than thirty-two (32) of the previous week, while ninety-eight (98) equities…

• It refines raw sugar into edible sugar.
• It controls over 60% of the sugar market in Nigeria.
• Its backward integration strategy has helped to bring down its input cost considerably in recent years.
• Her extensive, fast and reliable distribution network covers over 80% of the country.
• The company has outperformed its full-year 2016 net income as at half-year 2017 by 18.79%.
• It grew its revenue and net income in Q3 ‘17 by 41.5% and 156.2% against comparable period of 2016.
• We expect this streak of decent performances to be consolidated into FY 2017.
• The Company is an income and growth stock. Final dividend for FY 2017 is highly anticipated.
• Our target price for the stock is N25.00, representing a 13.9% upside potential.”

Lafarge Africa: Lafarge Africa has an installed cement capacity of 12 million metric tonnes (MMT) across its major installations in Nigeria.

• It has in the pipeline plans to ramp up this capacity to 18mmt by 2020.
• It has a strong presence in the south-south and south-east Nigeria through its operations of Mfamosing and Atlas Plants.
• The infrastructure inadequacies in Nigeria is a major incentive to hold the stock of Lafarge Africa for medium to long-term objective.
• In her recent 9M ’17 results, revenue and PAT grew by 38.9% and 102.5% respectively.
• It recently raised a capital of N131.7 billion through Rights Issue with the aim of reducing its debt obligation and strengthening bottom-line.
• Our target price for Lafarge is N70.00, representing a 34.6% premium to current market price of N52.00″

• Lower impairments and interest expenses are expected to boost the company’s bottom line going forward.
• The bank equally boosts one of the firmest Capital Adequacy Ratio (CAR) at 21% and provides ample buffer above the regulatory minimum of 15%.
• Its current balance sheet size is a major bolster for the firm going concern.
• The liquidity ratio of the group as at 9M ‘17 was 55%, thus above the regulatory minimum of 30%.
• In the bank’s 9M ’17 results, it reported a revenue and PAT growth of 39.8% and 35.5% respectively.
• Our target price on Zenith bank is N37.00, representing an upside potential of 19.35% to the closing price of N31.00 as at Friday, January 26, 2018.”

• The company has continued to build on works on backward integration in core value chain; sugar sweeteners, edible oils, feeds & proteins and cassava starches.
• It recently concluded the merger of Golden Penny Rice Ltd to its operations. This is expected to boost the company’s profitability.
• The backward integration strategy will help bring down its input cost considerably in years ahead.
• It has a good and reliable distribution network across the country.
• In her recent 6M ’17, revenue and PAT were grown by 17% and 44.9% respectively, resulting to an EPS of 317 kobo and a PE ratio of 9.46x against and industrial PE ratio of 15.2x.
• Our price target for Flour Mills is N42.00, representing 33.7% upside potential to the current market price of N31.42.”