GTI 5 Weekly Stock Pick - 010615


Monday, June 01, 2015 12:18PM / GTI Research

NSE Weekly Market Performance

The NSE All-Share Index and Market Capitalization appreciated by 0.11% and 0.12% to close on Friday at 34,310.37 and N11.659 trillion respectively.

Similarly, four indices finished higher during the week, including the NSE ASeM index, while four others finished lower. (See summary of Index movements in the table below).

Transcorp retains the top spot on this week’s GTI 5. The Conglomerates giant is well positioned in the economy to benefit from any boom. The Company reported a strong top line growth of 119.6% in its recently published FY 2014 report and despite a steep 52.5% decline in net income for the review period, our long term outlook on the company is still very positive.

climbs to the second spot this week. The Company has managed to translate marginal growth in revenue to strong double digit bottom-line improvement by cutting down distribution/ admin expenses by as high as 35% in Q3 2014. We expect this trend to continue in Q4. The bearish trend currently prevailing in the market has opened up a strong entry position into the stock for investors who want to benefit from the impressive 2014 performance of the Company

Julius Berger
retains the third spot this week. The leading construction company in Nigeria enjoys a large chunk of the construction contracts of the Federal government, and even though we expect a slowdown in awarding of new contracts due to the elections, we expect the company to record moderate performances in FY 2015. The infrastructure inadequacies in Nigeria is a major incentive to hold the stock of Julius Berger for the medium to long term

Dangote Cement
claims the fourth spot on the GTI 5 for this week. The company controls about 80% of the cement market in Nigeria and has made major in routes into other African countries. The recent announcement of a slash in cement price as well as the tightening margins due to the tax element on some of its production lines which previously enjoyed the 5year moratorium for expansion projects (including the economic parameters which has generally affected the market) has increased the stocks volatility in the recent past. However, our long term estimates for the firm are still realizable for its share market dominance.

retains the fifth spot on the chat this week, claiming the fifth spot. FBNH currently trades at a price to book value multiple of about 1 and we consider this as a very attractive window for short term investing.

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