TOP 5 WEEKLY STOCK PICK FOR THE PERIOD & WATCH LIST – Monday, May 29, 2017

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Good Day and Happy new week.

Below are the top 5 Weekly Stock Pick for the week Monday, May 29, 2017 & Watch List.

Also, check out the watch list for the new week.

Dangote Cement Plc
Target Price N230.20
Investment Horizon 12 Months
Statistics
Industry Industrial Goods
Price (N) N166.00
Shares Outstanding (Mn) 17.040
Symbol DANGCEM
Expected Return 38.67%
52Week High N203.96
52Week Low N149.26

Dangote Cement:

Dangote Cement is Africa’s leading cement producer with three plants in Nigeria and plans to expand into 13 other African countries. The Group is a fully integrated quarry-to-customer producer with production capacity of 29 million tonnes in Nigeria and new operations set to begin across the rest of Sub-Saharan Africa. The Group plans to have 42 million tonnes capacity by the end of 2016 and 50-60 million tonnes of production, grinding and import capacity in Sub-Saharan Africa by 2016. Dangote Cement’s Obajana plant in Kogi State, Nigeria, is the largest in Africa with 13 million tonnes capacity across four lines. The Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12 million tonnes. The Gboko plant in Benue State has 4 million tonnes capacity. Over time, Dangote Cement has eliminated Nigeria’s dependence on imported cement and is transforming the nation into an exporter of the product serving neighboring countries.

Total Nigeria
Target Price N320.00
Investment Horizon 12 Months
Statistics
Industry Oil & Gas
Price (N) N260.00
Shares Outstanding (Mn) 339.52m
Symbol TOTAL
Expected return 23.08%
52Week High N345.00
52Week Low N162.55

Total Nigeria:

Total Nigeria is one of the foremost oil and gas companies in the Nigerian oil sector. The company is one of the largest in terms of retail outlets  across the country and leverages on these outlets to push  sales volume. The company has also benefitted from the  deregulation of the downstream sector where it operates  as a result of its retail presence in the volume driven oil  marketing space. The company pays consistent dividend  and is a firm pick with PFA’s and FPI’s .The Company  has declared a final dividend of N7.00 bringing total  dividend for 2016 to N17.00.

Zenith Bank Plc
Target Price N22.02
Investment Horizon 12.Months
Statistics
Industry Financial Services
Price (N) N19.13
Shares Outstanding (Mn) 31.396
Symbol ZENITH
Expected Return 15.11%
52Week High, 52Week Low N19.13, N13.10

Zenith Bank:

Despite the challenges in the Nigerian financial services sector, with rising loan loss provisions as a result of their exposure to the oil and gas  sector as well as the potentially toxic power sector, doubts  about asset quality and weakening CAR, we still see  opportunities in the tier one banks. Zenith bank has one  of the strongest CAR’s in the sector and continues to  leverage on its stringent risk assessment framework to  mitigate capital erosion. The Bank’s balance sheet size is  a major incentive for us at this time because we believe  that its size/liquidity is a competitive edge in an economy  awash with opportunities like the Nigerian economy.  The bank also has strong brand acceptability and a wide  branch spread.

Dangote Sugar
Target Price 7.8
Investment Horizon 12 Months
Statistics
Industry Consumer Goods
Price (N) 6.800
Shares Outstanding (Mn) 12billion
Symbol DANGSUGAR
Expected return 14.70.%
52Week High/Low 7.20/5.71

Dangote Sugar:

Dangote Sugar Refinery (DSR) Plc plans to invest N106 billion in the expansion of operations in the next six years and as it targets to  produce 1.5 million tonnes of refined sugar from  locally grown sugarcane during that period. The  Company reported better than expected Q1 -2017  numbers driven mainly by price increases rather  than volume sales. However, despite this  situation, the higher output from Savanah was a  welcomed development and helped reduced the  effect of high Forex on input cost. Our FY 2017  annualized profit projection of N5.20 is achievable  and our target price of N7.80 will see the company  trading at a full year P/E of 1.5 which in our  opinion is realistic.

UBA Plc
Target Price 8
Investment Horizon 12.Months
Statistics
Industry Financial Services
Price (N) N7.50
Shares Outstanding (Mn) 36,280
Symbol UBA
Expected Return 6.67%
52Week High/Low 7.60/3.89%

UBA:

Despite the challenges in the Nigerian financial services sector, with rising loan loss provisions as a result of their exposure to the oil and gas sector, as  well as the potentially toxic power sector, doubts  about asset quality and weakening CAR, we still  see opportunities in the tier one banks. UBA reported impressive Q1 -2017 numbers and  even though loan loss provisions were high, in  absolute terms, the figure is not alarming and was  adequately compensated by the N27.6billion rise  in gross earnings, amounting to a 37% YoY  expansion. Our expectation for FY 2017 is  conservative and makes provision for a further  rise in loan loss provision and yet, our price target  is reasonable.

Watch List:

Julius Berger, Nestle, NB, GT

 

 

 

(GTI securities Limited)

 

 

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