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Which Sectors Made you Money in 2012?

Category: Investors NewsBeat


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Which Sectors Made you Money in 2012?

Friday, 04 January 2013/ The Analyst, Proshare

Executive Summary:

  

1.    Agriculture Sector: Here Presco Plc, listed under the Crop Production sub-sector of the bourse gained 96.08% followed by Livestock feeds (92%) with a year high of N1.74. Instructively, none of the stocks within the Agriculture sector lost even as EllahLakes and FTN Cocoa closed flat.

  

2.    Consumer Goods: Out of 30 stocks listed under Consumer Goods, 12 stocks (40%) gained while 11 stocks (36.97%) lost as seven (7) stocks closed flat. International Breweries Plc led the gainers chart with +184.21% while Vitafoam lost -31.07%.

  

3.    Industrial Goods: Of the twenty seven (27) stocks listed in this sector, 9 stocks (33.33%) gained while 8 stocks (29.63%) lost. The remaining 10 stocks were flat throughout the year. Paintcom and CAP led the gainers chart with +276.92% and +93.10% respectively while Avon crown lost -68.01%.

  

4.    Conglomerates: Here, Transcorp Plc led the gainers chart with +87.50% followed by UACN Plc while Johnholt Plc lost -42.28%.

  

5.    Financial Services: The banking sub-sector here led the gainers camp with Diamond Bank gaining +145.77% followed by Access Bank +79.56%. Of the top 10 gainers, 9 stocks came from the banking sub-sector with the exception of Mansard (Insurance sub-sector) which made an impressive showing.

  

6.   HealthCare: 50% of the stocks within the Healthcare sector lost value with Morison Industries losing -61.66% while GlaxosmithKline, a Pharmaceutical company gained +96.09%.

  

7.    ICT: With the exception of NCR Plc listed under IT Services sub-sector, none of stock gained while E-Tranzact Plc lost -22.27% with a negligible average sector performance of 0.02%.

8.    Services: 22.72% of the stocks listed under Services gained while 36.36% closed flat. Air Services Plc gained +92.63% during the year while Ikeja Hotel Plc lost -50.62%.

  

9.    Construction/Real Estate: On the average, this sector lost -0.72%; 50% of which closed flat while Arbico Plc lost a staggering -73.42%.

 

10. Natural Resources: None of the stocks in the sector gained while BOCGAS Plc lost -8.76%.

 

11. Oil & Gas: This sector was the worst hit in the year with a value loss of -25.98% while FO, Chevron and Oando lead the losers chart.

 

Sector Performance Analysis – A Fundamental Aspect of Stock Screening

  

One of the most important tasks to do at a time like this is to screen stocks to ferret out great stocks and map out a plan for the New Year.

 

Evidently, a better appreciation of the big picture in the economy, business and financial environment; properly dissected will help in contextualising the information thrown out by technical analysis.

 

Investors achieve this objective by using a top-down (TD) or a bottom-up (BU) investing approach. In the former, the goal here is to narrow down on which sector/industry will generate the best returns and then narrow this down to individual companies in that sector that will benefit the most from fiscal, monetary, political, demographic and consumer shifts.

 

With the later, the goal here is to discover companies that will deliver earnings growth, capital appreciation or low P/E ratios irrespective of developments in the economy, political terrain, monetary of fiscal policies.

Whichever approach is adopted, stocks will have to be screened and narrowed down to those that will fit into either a ‘long’ or ‘short’ preferences.

  

Sector Analysis

  

Sector analysis involves identification and analysis of various industries or economic sectors that are likely to exhibit superior performance. Academic studies indicate that the health of a stock's sector is as important as the performance of the individual stock itself. In other words even the best stock located in a weak sector will often perform poorly because that sector is out of favor. Each industry has differences in terms of its customer base, market share among firms, industry growth, competition, regulation and business cycles. Learning how the industry operates provides a deeper understanding of a company's financial health

  

The Economy in 2012

  

The Nigerian Economy in 2012 is represented by the table below:





 Agriculture Sector

 

Here Presco Plc, listed under the Crop Production sub-sector of the bourse gained 96.08% followed by Livestock feeds (92%) with a year high of N1.74. Instructively, none of the stocks within the Agriculture sector lost even as EllahLakes and FTN Cocoa closed flat.

 

 

Consumer Goods

 

Out of 30 stocks listed under Consumer Goods, 12 stocks (40%) gained while 11 stocks (36.97%) lost as seven (7) stocks closed flat. International Breweries Plc led the gainers chart with +184.21% while Vitafoam lost -31.07%.

 

 

Industrial Goods

 

Of the twenty seven (27) stocks listed in this sector, 9 stocks (33.33%) gained while 8 stocks (29.63%) lost. The remaining 10 stocks were flat throughout the year. Paintcom and CAP led the gainers chart with +276.92% and +93.10% respectively while Avon crown lost -68.01%.

 

 

Conglomerates

 

Here, Transcorp Plc led the gainers chart with +87.50% followed by UACN Plc while Johnholt Plc lost -42.28%.

 

 

Financial Services

  

The banking sub-sector here led the gainers camp with Diamond Bank gaining +145.77% followed by Access Bank +79.56%. Of the top 10 gainers, 9 stocks came from the banking sub-sector with the exception of Mansard (Insurance sub-sector) which made an impressive showing.

 


HealthCare

 

50% of the stocks within the Healthcare sector lost value with Morison Industries losing -61.66% while GlaxosmithKline, a Pharmaceutical company gained +96.09%.

 


 

ICT

With the exception of NCR Plc listed under IT Services sub-sector, none of stock gained while E-Tranzact Plc lost -22.27% with a negligible average sector performance of 0.02%.

 


 

Services

 

22.72% of the stocks listed under Services gained while 36.36% closed flat. Air Services Plc gained +92.63% during the year while Ikeja Hotel Plc lost -50.62%.

 


Construction/Real Estate

 

On the average, this sector lost -0.72%; 50% of which closed flat while Arbico Plc lost a staggering -73.42%.

 


Natural Resources

 

None of the stocks in the sector gained while BOCGAS Plc lost -8.76%.

 

  
Oil & Gas

This sector was the worst hit in the year with a value loss of -25.98% while FO, Chevron and Oando lead the losers chart.

 



References and Additional Resource:

 

1.     Stock selection criterion

2.     Cash-flow Challenges Cast Dark Cloud Over Oil & Gas Stocks as Sector Bleeds

3.     ALERT: Likely fall in Future Earnings in the Building Material Sub-Sector

4.     Stocks Hitting 52wk High & Low @ Dec 2012

5.     66 Stocks on the Caution List for 2013

6.     Nigerian market is completely out of bottomed-out stage

7.     Reviewing The Nigerian Economy in 2012 – What a Year! Bismark Rewane, FDC

8.     NASS passes N4.987trn 2013 budget

9.     FG set to force down cement prices

10.  Relatively benign food price gains ease inflation outlook

 

About the Authors:

 

Taiwo OLOGBON-ORI, Reshu BAGGA and Olufemi AWOYEMI, FCA.

 

Disclaimer/Advice to Readers:

While the website is checked for accuracy, we are not liable for any incorrect information included. The details of this publication should not be construed as an investment advice by the author/analyst or the publishers/Proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising from the use of this information. All opinions on this page/site constitute the author’s best estimate judgement as of this date and are subject to change without notice. Investors should see the content of this page as one of the factors to consider in making their investment decision. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. This information is published with the consent of the author(s) for circulation in/to our online investment community in accordance with the terms of usage. Further enquiries should be directed to info@proshareng.com or/and analyst@proshareng.com. 



Tags: Stock Screening,  Sector Analysis,  Sectoral Review,  Nigerian Stock Exchange,  Top Performers,  Presco,  International Breweries Plc,  PAINTCOM Plc,  Transnational Corporation of Nigeria Plc,  Diamond Bank Plc,  GlaxoSmithKline Consumer Nig Plc,  NCR Plc,  AirService Plc,  Smurfit Plc,  Access Bank Plc,  Oando Plc,  Agriculture Sector,  Consumer Goods,  Industrial Goods,  Conglomerates,  Financial Services,  HealthCare,  ICT,  Services,  Construction/Real Estate,  Natural Resources,  Oil & Gas, 



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