Morison, Honeywell, LASACO, others give investors over 100% return in 2021
Some stocks trading on the Nigerian Exchange Limited (NGX) have outperformed the market with returns in excess of 100 percent, BusinessDay’s analysis of market data for the first nine months of 2021 shows.
Investors who bought any of these stocks at the start of the year have seen the value of their investments more than double since then.
Top among the outperformers is healthcare manufacturing company, Morison Plc, which traded at N2.10 per share on September 30, representing a 311.8 percent gain this year.
Similarly, investors who currently hold shares of LASACO Plc priced at N1.19 per share at the end of the nine months under review saw the value of their stock rise by 240 percent.
Note that on February 26, 2021, LASACO Plc did a share reconstruction of 4-for-1 which would have disqualified the insurance company, but our data compares companies’ share prices from year-open till September 30.
LASACO’s share price opened the year (on January 4, 2021) at 38kobo per share pre-reconstruction but post-reconstruction equivalent it is N1.52 per share which implies that its reconstruction represents a -21percent negative return in nine months. It stood at N1.19 as of September 30.
Investors in Honeywell Flour Mills Plc which stood at N3.76 as at September 30 have booked a 213.3 percent capital appreciation since the beginning of this year.
“Stock prices typically reflect investors’ expectations about future corporate performances”, Meristem analysts said in their equity commentary for September.
Investors who took positions in Champion Breweries Plc at the start of the year have seen capital appreciation gains of 143 percent while investors in Cutix, whose share prices hit a new high of N4.95 on September 30, can boast of an increase of 115.2 percent.
To compensate for periodic market jitters and to minimise losses in this second half (H1), stock analysts recommend a reallocation of funds to value and income strategy for long-term and short-term investors, respectively.
They say that even with the recent moderation in fixed income yields, the current allocation to equities appears consistent with the historical trend, and it is less likely to play a big part in prodding prices.
Nigeria’s stock market increased by 2.55 percent in the month of September, thanks to last minute bargain hunting activities two days to the month’s end.
September’s gain was fuelled by investors’ interest in industrial and consumer goods stocks.
AXA Mansard at N2.33 per share on September 30 implies it has increased by 121.9 percent this year. At 44kobo per share Regency Alliance Plc traded on September 30, it has increased by 100 percent this year.
The N17.10 per share which Vitafoam Nigeria Plc closed at the end of the nine months being reviewed implies 119.2 percent increase this year.
In value terms, investors booked about N521 billion gain in September which almost helped erase the negative return year-to-date (YtD) which had printed at a new low of -0.12 percent as at September 30 from -2.61 percent in August.
At N710 per share, Seplat Energy Plc share price went up by 76.5 percent in nine months; while Total Energy Plc at N197 per share as at September 30 implies an increase of 47.7 percent in nine months to September 30. United Capital Plc at N8.95 per share, was 90 percent higher compared to its year-open price.
At N29.60 per share Guinness Nigeria Plc closed at the end of the review nine months, implying the stock has increased by 55.8 percent. The share price of Livestock Feeds Plc which stood at N2.17 as at last Thursday implies a 56.1 percent increase this year. Pharma-Deko has also increased by 56.7percent this year to N2.35.
Lagos-based GTI Research analysts in a September 30 note to investors said they expect mixed sentiment this week as investors take profit on the appreciated stocks, as well as hunt for the lower priced stocks with good fundamentals. “Furthermore, investors will also track yield movement in the fixed income market.”
“Going into the new month, we expect the market to continue to trade in a similar pattern amid local investors dominating the scene,” according to equity analysts at Vetiva Research.