The report highlights stocks with share prices below ₦20 that have more than doubled in value, which could be a smart investment choice for individual investors.
An individual who had invested ₦1 million in any of the cherry stocks trading at a share price of below ₦20 at the beginning of the year and held over 500,000 units of shares would have more than doubled their investment.
A prospective investor with approximately ₦1 million or less could also find these high-growth stocks, currently selling at ₦20 per share or below, to be attractive.
A booming stock market
The Nigerian stock market has recorded a significant boom since the beginning of this year, returning approximately ₦30 trillion in gains to investors.
A review of the NGX market data shows that the stock market has appreciated from ₦62.763 trillion in market capitalisation as of January 2 to ₦92.725 trillion as of December 4.
This has made the market capitalisation, known as the overall value of all the listed stocks on the NGX, return 47.74 per cent to investors.
Top sub-₦20 booming stocks
Analysis of stock market data reveals that 19 stocks with share prices below ₦20 have more than doubled since the beginning of the year.
The stocks are spread across many sectors, including banking, consumer goods, insurance, agriculture, conglomerates, construction/real estate, healthcare, ICT and services.
Mutual Benefits Assurance currently leads the pack of the high-growth stocks below ₦20 per share that have more than doubled investors’ money.
Its share price has risen by 404.92 per cent to close at ₦3.08 on Thursday, December 4. A simple calculation will mean that an investor who had invested ₦1 million would have seen the shares appreciate to ₦4,049,200 in value and would have gained over ₦3 million.
Ellah Lakes had followed with a 315.82 per cent rise in its share price to ₦13.14. Champion Breweries comes third on the list with a 279.27 per cent share price appreciation to ₦14.45.
While SCOA Nigeria’s share price has risen by 244.66 per cent to ₦7.1 per share, Honeywell Flour Mill makes up the top five with a 203.97 per cent rise in its share price to ₦19.15 as of December 4.
International Breweries stands at the least among the 19 stocks that have more than doubled their share prices. Its stock price has risen by 104.5 per cent to ₦11.35.
Wema Bank followed from the bottom ladder with a 107.69 per cent growth in its share price to ₦18.9. Red Star Express’ share price has risen by 108.62 per cent to ₦9.2.
See the table below for all the low-cost stocks that have quietly doubled their share prices, which analysts say could be perfect targets for a ₦1 million investment with high stakes.
Those stocks are categorised as cherry picks and are mostly driven by market sentiments rather than strong fundamentals, the National President of the New Dimension Shareholders Association, Patrick Ajudua, said.
“Those stocks are regarded as cherry picks, and investors are generally delighted at the economic revival of those companies and the positive prospect of turnaround,” he told Pinnacle Daily.
“But I must quickly say that investors must exercise caution in trading, as much of it isn’t backed up by fundamentals but market sentiment,” he advised.
Ajudua added, however, that some of the cherry-picked stocks, such as Wema, Mutual and SCOA, hold a better future return for investors, while stocks like Aso Savings and Loans, DAAR Communications, and some insurance companies are driven by market sentiments.
An investment and portfolio analyst, Abel Ezekiel, had earlier highlighted some of the reasons driving investors’ sentiment in the equities market in recent times.
He noted some of the factors impacting the market, including fear of insecurity, foreign investors exiting the market, the issue of capital gains tax that has yet to be fully addressed, and low incentives and poor interim dividend payments to shareholders.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
