As of August 2024, eight Nigerian stocks have achieved triple-digit Year-to-Date (YtD) gains, highlighting their exceptional performance amid market volatility.
The top performers are Juli Plc, Oando Plc, RT Briscoe, Julius Berger (JBERGER), Veritas Kapital (VERITASKAP), Presco Plc, Geregu Power (GEREGU), and BUA Foods (BUAFOODS).
Despite broader market fluctuations and a cooling trend from earlier highs, these stocks have garnered significant investor interest.
Broad Market Overview
The NGX All-Share Index (NGXASI) closed at 96,579.54 points on August 30, 2024, reflecting a YtD gain of 29.16% and a market capitalization of N55.49 trillion.
Although the index’s growth has slowed from 39.84% at the end of Q1 2024 to 29.16% by August, it remains positive.
Historical Context: The NGXASI achieved a 45.90% return in 2023, suggesting that while 2024 has seen a slowdown, the market remains in positive territory.
This highlights the need for sector-specific analysis, as opportunities for gains still exist in certain stocks and sectors.
Company Highlights
BUA Foods (+104.19% YtD): BUA Foods has been a standout performer in the Consumer Goods sector, boasting a YtD gain of 104.19%, which places it eighth on the Nigerian Exchange (NGX), taking the stock to a 52-week high of N394.90, up from N193.40 at the beginning of the year.
In the first half of 2024, BUA Foods reported a pre-tax profit growth of 25.41%, reaching N137.189 billion. Earnings per share (EPS) also grew by 37.43% to N7.27.
Despite a high P/E ratio of 48x, suggesting a premium valuation, BUA Foods’ robust earnings growth appears to support its rally. The stock’s low beta of -0.065 indicates stability, which may be appealing to risk-averse investors.
Geregu Power (+150.63% YtD): Geregu Power’s stock surged 150.63% YtD, with a notable 168% increase last year.
The company reported a 24% rise in pre-tax profit to N30.2 billion for the first half of 2024, with EPS at N8.01.
Despite a high P/E ratio of 87x, the stock’s strong financial performance and lower beta of 0.399 suggest it offers growth with stability. The high valuation appears justified by expected growth but requires monitoring.
Presco Plc (+151.50% YtD): Presco achieved a 151.50% YtD gain, becoming the top performer in the Agricultural sector.
The company’s net income grew 18% to N38.877 billion in the first half of 2024, surpassing the entire 2023 figure.
With a P/E ratio of 8.57x and a dividend yield of 5.42%, Presco’s strong profitability and attractive valuation support its share price rally.
Veritas Kapital (+272.97% YtD): Veritas Kapital’s share price increased by 272.97% YtD, starting at N0.37.
The company reported a 414% YoY surge in pre-tax profit to N5.8 billion for the first half of 2024, with a return on equity of 40%.
Despite a high price-to-sales ratio, the stock’s low beta of 0.344 and strong financial performance support its price increase. However, potential overvaluation in the short term could limit further gains.
Julius Berger Plc (+319.77% YtD): Julius Berger’s stock surged 319.77% YtD, starting at N43.00.
The company reported a pre-tax profit of N25.2 billion in the first half of 2024, a 123.2% increase from the previous year.
With a P/E ratio of 15.77 and strong earnings growth, the stock’s rally is supported by solid financial fundamentals. However, high valuations warrant careful monitoring.
RT Briscoe (+429.85% YtD): RT Briscoe’s share price increased by 429.85% YtD, starting at N0.61.
The company posted a net income of N509.01 million for H1 2024, a significant recovery from the previous year’s loss. Despite the impressive rally, negative valuation ratios and potential liquidity issues raise concerns about the sustainability of the gains.
Oando (+657.64% YtD): As of the end of August 2024, Oando recorded a year-to-date gain of 657.54%, placing it second on the NGX.
The stock has also surged by an impressive 204% in the past four weeks, making it the second-best performer on the NGX during this period. In the previous year, Oando recorded a year-to-date gain of 153.93%.
In 2023, Oando’s pre-tax profit surged to N104.1 billion, reversing from a pre-tax loss of N61.8 billion in 2022. Recently it announced the acquisition of Nigerian Agip Oil Company, which is expected to significantly enhance production capacity and shift its revenue towards more stable and profitable sources.
The company’s price-to-earnings ratio stands at 13.55, notably below the industry average of 46. It has a very low stock beta of 0.005, indicating low volatility compared to the market. However, its price-to-book ratio is -0.48, in contrast to the industry average of 0.47, and its price-to-free cash flow ratio is 9.08, slightly higher than the industry average of 8.27.
Overall, the strong turnaround in profitability and the strategic acquisition are likely driving investor confidence, even if some ratios suggest potential concerns or opportunities for adjustment
Juli Plc (+1,646% YtD): Juli Plc experienced a staggering 1,646% YtD gain, making it the top performer on the NGX.
The company recorded a significant turnaround with a profit of N3.42 million in the first half of 2024, recovering from a previous loss.
The company’s high P/E ratio of 120.79 suggests strong future growth expectations, supporting the share price rally. However, this also implies a risk of overvaluation if earnings fall short.
The negative price-to-book ratio of -3.37 raises concerns about financial stability, potentially undermining investor confidence.
While the high price-to-sales ratio of 5.63 and solid pre-tax margin of 4.66% support the rally by indicating strong operational efficiency, the overall high valuation and negative book ratio introduce caution.
Overall, the exceptional YtD gains of these eight Nigerian stocks demonstrate significant performance in a challenging market.
While their strong financial results and strategic developments have driven their rallies, investors should consider the broader market trends, valuation ratios, and potential risks when investing in these stocks.