INVESTDATA WEEKLY STOCK PICKS

The Nigerian stock market had a mixed performance last week as the market reversed its bearish trend at the mid-week for bull to take over.
The negative mood in the market changed as smart money and traders accumulate stocks at low prices, thus improving confidence across the market due to expectations from the May 29 handover and inauguration of the new president.

The composite Index NSEASI and Market capitalisation closed higher at 34,439.52 and N11.63 trillion respectively recording 0.15 percent growth.

NSEASI

It’s true that general market direction makes up 50 percent of a stock price movement, meaning that market timing in stock trading and investing cannot be overemphasised as it guides your entry and exit of the market and trades.  Market bottoming out at this point is important after it seems it has lost direction due to profit taking, 'wait and see attitude' of the in-coming government reforms, policies and the calibre of ministers and the economic team to drive the new Concept Change.

Many investors and traders want to be investing and trading in stocks during a bull market when the market is in a confirmed up trend.  This confirmation usually occurs when a major index follow through on day four or later after its rally attempt.  The first two or three days of a rally are normally disregarded, as the rally has not yet proven it will succeed and follow through with strong volume to indicate the beginning of the bull. Therefore, a follow-through day occurs when at least one of the major indexes makes a big percentage gain in higher volume. The percentage gain should generally be in the area of two percent or more.

The recent continuation pattern of the NSEASI called pennant signifies a breakout in the up or down direction, suggesting that any position taken now in quality companies as discussed at INVESTDATA Traders & Investors trading workshop over the weekend  will rally with the market especially in the equities that make up the NSE 30 that move with the market.

STOCKS TO TRADE

DANGOTE CEMENT PLC (DANGCEM)

This is a leading cement manufacturing company in its industry in terms of metric tonnes, share price, earnings power and in market share, where it had more than 70 percent control of the market share. Its earnings performance in the recent years have been impressive as the company continued to expand its production capacity. The share price had moved opposite of its earnings performance due to prolonged market correction as a result of uncertainty surrounding the general election. The company first earnings outing for 2015 indicates strong performance that would drive price if sustained in the subsequent reports.   

Company Figures
Share Data	Ratio Analysis
Market Cap: N3.04 Trillion	Net Assets per share:N38.86
Net Assets: N662.27 Billion	Price/Book Value:  4.90
Shares Outstanding:17.04 Billion	ROE: 10.36%
Current Price: N178.50	Div Yield: 3.27%
52-Weeks High/Low N250.01/N139.10	Q1 EPS: 4.03
Year High/Low N200/N139.10	Q1 PE ratio: 11.40x

Source NSE, Coy &InvestData Research                                 

DANGCEMChart

The chart above revealed that the stock came down a long way trending lower lows and recently form a bullish channel pattern, with  low strong support level at N141 and N150 respectively while the top resistance line are at N162 and N185.22.  The retracement of the stock is imminent as fresh positioning by traders and investors are likely to pull price to the first orange resistance line at the breakout would give a return of 3.36 percent. The 2nd red resistance level after that, which would give a return of 18.77 percent, the 3rd target is the yellow resistance level that would give a return of 28.83 percent and the 4th target is the last black resistance line with expected return of 37.25 percent. Any further break out below the supportlevel at N164 and a stop loss of N10.20 which is below N164 so that your capital can be protected from further losses.

ACCESS BANK PLC (ACCESS)
This is a one shop financial institution that is into commercial banking, investment banking and securities trading with strong corporate, retail and investment banking products that are driving the impressive numbers being posted. Regardless of all the factors militating against the banking sector, its earnings are robust to support its share price for upside potential and with expected interim dividend in the nearest future. The bank share price had suffered as it trades at discount with high margin of safety.

Company Figures                                 

Share Data	Ratio Analysis
Market Cap: N141.42Billion	Net Assets per share:N12.81
Net Assets: N293.21 Billion	Price/Book Value:  0.47
Shares Outstanding: 22.88 Billion	ROE: 15%
Current Price: N6.18	Div Yield:10.00%
52-Weeks High/Low N10.18/N4.50	Q1 EPS: 0.60
Year High/Low N7.02/N4.50	PE ratio: 2.64

Source NSE,Coy&InvestData Research                                 

ACCESS BANK Chart

Looking at the chart you can see that the stock had been trending down for a period of nine months before reversing in January and recently forming symmetrical triangle with a double bottom pattern at the green higher highs support line. The stock had pullback as it adjusted for dividend and down to the support line at N5.99. It is currently side trending with upward reversal imminent as signaled by MACD and RSI is below 50 currently at 48.23 level.  As we expect the stock to retrace at this point to the first orange resistance line, which would give a return of 3.56 percent. The 2nd target is the red resistance level, which would give a return of 13.10 percent, and the 4rd target which is the yellow resistance line with expected return of 29.44 percent. Any further break out below the last support level at N5.60 and a stop loss of 58 kobo which is anything not below N5.60 so that your capital can be protected from further loss. The upside potential of this stock is huge.

ZENITH INTERNATIONAL BANK PLC (ZENITH BANK)

This is a financial institution that is leading in profitability for two straight years with strong capital base and healthy risk management strategy. It ranks among the top 500 banks in the world and top two in the industry.
Its strong commercial banking with aggressive marketing and customer service delivery in investment banking, corporate banking and retail banking products that are driving the impressive numbers being posted. Regardless of all the factors militating against the banking sector, the bank's earnings are robust to support its share price for upside. 

Company Figures                                 

Share Data	Ratio Analysis
Market Cap: N697.63 Billion	Net Assets per share:N16.77
Net Assets: N526.43 Billion	Price/Book Value:  1.26
Shares Outstanding: 31.40 Billion	ROE: 5.26%
Current Price: N22.22	Div Yield: 8.27%
52-Weeks High/Low N25.80/N14.54	Q1 EPS: 0.88
Year High/Low N25.48/N14.54	Q1- PE ratio: 6.42

Source NSE,Coy&InvestData Research                                 

ZENITH BANK Chart.

The chart above revealed that the stock had form symmetrical triangle with strong support level at N16.49 and N20.75. The recent double bottom has ushered in a reversal as fund managers accumulate at the new price. Indicators like money flow, RSI, Bollinger band, MACD and candle stick confirm this reversal at the current market price.  As we expect the stock to continue to trend to the first orange resistance line, which would give a return of 7.11 per cent. The second target is the black resistance line, which would give a return of 11.26 per cent, and the third target is the black resistance line, which is expected return of 14.32percent. Any further break out below the support level at N20.75 and a stop loss of N1.54 so that your capital can be preserved.  The upside potential of this stock is huge especially now that the market expects new government economic reforms to drive economy and the market.

AFRICA PRUDENTIAL REGISTRAR PLC (AFRIPRUD)

Africa Prudential Registrars Plc is a potent business unit which successfully weathered the inclement financial environment of the past, while still waxing strong and being in contention for the leading Registrar firm in Nigeria.   The company has demonstrated strength in keeping share registration data for companies and since it got listed on the floor of Nigeria Stock Exchange. It has consistently posted strong earnings that had supported dividend payout. Its earnings and assets are robust to support its share price going forward as the company free cash flow support operations. 

Company Figures                                 

Share Data	Ratio Analysis
Market Cap: N5.98 Billion	Net Assets per share:N2.45
Net Assets: N4.90 Billion	Price/Book Value:  1.16
Shares Outstanding: 2 Billion	ROE: 7.62%
Current Price: N2.99	Div. Yield: 12.18 %
52-Weeks High/Low N3.57/N2.30	Q1 EPS: 0.19
Year High/Low N3.57/N2.30	Current PE ratio: 3.95

Source NSE,Coy&InvestData Research                                 

AFRICA PRUDENTIAL Chart

The chart above revealed that the stock had been trending down for a period more than eight months, before  recently formed a symmetrical triangle and side trending at N2.99 resistance level for a while now. Reversal is imminent as MACD signals and RSI above 50. As the stock retrace toward the first orange resistance line, which would give a return of 1.67 per cent. The second target is the yellow resistance level, which would give a return of 7.02 per cent, and the third target which is the black resistance line with expected return of 10.36 per cent. The last resistance level which is at N3.57 is expected to give return of 19.39 percent if it breakout. 
Any further break out below the support level at N2.65 and a stop loss of 34k which is anything not below N2.65 so that your capital can be protected from any further eroding.

Conclusion

In line with our expectations of mixed performance outlook of the Index last week, the ASI shrugged off further downward pressure to close that week with marginal gains.
We expect the market to remain bumpy this week with great possibilities of expanding the week gains and advised that investors should go for quality companies that were revealed at the just concluded INVESTDATA workshop.

Thanks! Thanks!! Thanks!!!!!!!
We at InvestData Consulting Limited are saying big thanks to all participants at the just concluded Traders & Investors trading workshop and the facilitators for making the event a huge success.
Also, we want to use this medium to inform the investing public that the workshop materials are available in DVD’s and hard copies. Have a nice trading week.