Nine bullish stocks that you can bet on

capital market oct

The ability to defy turbulence is a rarity in the capital market. But good market always attracts quality customers. Despite the protracted Bearish market, ...

The ability to defy turbulence is a rarity in the capital market. But good market always attracts quality customers. Despite the protracted Bearish market, ...

some stocks have been very formidable to the extent of defying the Bearish market trend. Even though analysts think the companies have reported impressive performance, many believe it is a remarkable feat to keep heading North even when many stocks are south bound. The performances of these stocks are more impressive given the persistent market and economy wide depression. This year the market is about 16% negative. Other market indices are not any better as all of them are also in the red. For instance; the NSE oil & Gas index is negative by 31%, NSE Banking index stand at 25% negative. While the F&B is negative at 20%, the Insurance sector has also been bleeding and stands at 10% negative.
 Some of these stocks include; Nestle Nigeria Plc, Guinness Nigeria Plc, Nigerian Breweries Plc, Seven –Up Bottling Company Plc, Okomu Oil Palm Plc, Transnational  Corporation of Nigeria (Transcorp) among others.

NESTLE NIGERIA PLC

Nestle Nigeria Plc's stock has maintained a bullish trend over the years. This bullish streak has not shifted even this year. Investors in Nestle have been happy with its performance over time. This year alone, the stock has appreciated significantly by 9.5%or N31.46 per share from N368.55 in January 4, 2011 to N400.01 per share. At the current price of N400.01, Nestle is the most valued stock in the Nigerian Stock Exchange's price chart.
It is a blue chip and this status has earned the company huge respect. Investors can hardly talk about high- flying stocks in the Nigerian equity market without mentioning Nestle Nigeria Plc. Its share price is aboutN185.88 higher than Total Nigeria Plc, the next highest priced stock in the market, in the price movement chart which traded at N200.00 per share as at last Friday.

Being the first stock to cross the price of N100.00 on the Nigerian Stock Exchange, it has remained a trail blazer and an interesting investment from Nestle.
In fact, the promoters of the company and other stakeholders including shareholders seem impressed with it. However, the company has performed well over the years. While it targets profit after tax of N2.670billion in its forecast for the Q4 which will end in December 2011, the company achieved a PAT of N9.142billion and Turnover of N70.904billion in the Q3 September 2011.
 It has been significantly generous with dividend over the years. For instance, it paid dividend of N10.60 to shareholders in 2010. Nestle still remains one of the stocks that are riding against the wave of industry trend and is still enjoying the commanding height in the Food/Beverages and Tobacco sub-sector of the NSE.

NIGERIAN BREWERIES Plc

The shares of Nigerian Breweries Plc have been on a steady rise despite  the debilitating market challenges which have hobbled the market  since late January 2011.The stock which has continued its robust trajectory North, has become the toast of investors. This year alone, its investors have reaped (N14.18) or 18% per share from the stock which traded at N77.32 per share on January 4, 2011 to N91.50 at the close of business last Friday. Further details show that it has appreciated by (N36.93) or 68.4% per share in three years, from the price of N53.92 in Q3 2008 to N90.85 in Q2 2011. This development has been attributed to the company's impressive performance over the years. In the Q2 its turnover increased by 25% to N110.201billion in 2011 from N88.444billion in 2010. Its profit after tax also rose by 18% to N18.722billion from N15.878billion. Similarly, its turnover for the financial year ended 2010 went up by 13% from N164.2billion in 2009 to N185.9billion. Operating profit grew by 8% from N41.7billion to N45billion. The company ended the year with a profit after tax of N30.3billion, an increase of 9%from the N28billion of the previous year.

The company, however, paid a total dividend of N18.150billion, representingN2.40 per share. It had earlier paid an interim dividend of N8.696billion, translating to N1.15 per share declared on May, 2010 and a final dividend of N9.453billion, representing N1.25 per share which was paid in May 19, 2011. It has acquire Sona Breweries in Ota, Ogun State and Kaduna and Life Breweries Company Limited, Onitsha. Speaking in Lagos recently, Managing Director of NBPlc, Mr.Nicholas Vervelde, noted that “The companies (and the breweries) were amongst the assets initially acquired from the previous owners by two holding companies belonging to Heineken N.V. The shares in the said two companies were offered to us for purchase by those holding companies. One of the opportunities created by the offer is a ready availability of capacity that will enable us compete effectively in the market.  This acquisition opportunity is therefore a very good investment decision we needed to take as it will give us a quick access to production capacity and facilities”. He added, “ Apart from increased capacity which the proposed acquisition will provide, we will be adding three brands, Goldberg (lager), Malta Gold (malt) and Life (lager) to our portfolio”. The company has been consistent in the payment of dividends over the years. It paid a dividend of 135kobo in 1998; 150 kobo in 1999; 158kobo in 2000;225kobo in 2001; 210kobo in 2002; 110 in 2003; 40kobo in 2004;105kobo in 2005;144kobo in 2006;250kobo in 2007; 290kobo in 2008 and 240kobo in 2010. Investors are impressed with the company's performance that they are holding on to its stocks.

GUINNESS NIGERIA PLC

Guinness Nigeria Plc, a leading firm in the breweries industry, has grown its turnover by 10% in the Q2  ended December, 2010. Details show that the company's turnover increased from N53.582billion in 2009 to N59.229billion in 2010. The company's profit after tax also rose by 2.17% to N7.339billion from N7.183billion the previous period while fixed assets increased by 5.43% from N40.069billion to N42.246billion in the period of review while  its working capital declined by 6.35%.
In the last financial year ended June 30, 2010, the company declared dividends of N112.2billion which translates to a dividend of 825 kobo per share. However, the company explained that the dividend was in respect of 2009 financial year-end. It had also paid a dividend of 375kobo in 2002, 475kobo in 2003, 525kobo in 2004, 300kobo in 2005, 400kobo in 2006, 450kobo in 2007, N12.00 in 2008, 750kobo in 2009 and 825 kobo in 2010.Indeed, Guinness Nigeria has been generous with bonuses to shareholders. The company gave a bonus of 2 for 3 units shares held in 2003 and 1 for 4 units held in 2006.  Guinness Nigeria Plc has gained N11.44 or 6% this year from N190.56 per share early in the year to N202.00 last Friday. A more critical appraisal of its stock performance shows that it has appreciated by 79% N101.85 per share in three years from March 3, 2008 to date.

Guinness Nigeria Plc is engaged in the brewing, packaging and marketing of beer. Its products include Guinness Foreign Extra Stout, Guinness Extra Smooth, Malta Guinness, Harp Lager Beer, Gordon's Spark, Smirnoff Ice, Satzenbrau and Top Malt. The Company is a subsidiary of Diageo Plc. Its unaudited result for the half year ended 31st December 2009 showed growth in turnover by 23.8% to N53.842billion from N43.483billion in the comparable period of 2008. Profit after tax stood at N7.183billion, representing 10.8% drop from N8.059billion in 2008.The Company explained it invested significantly behind the brand portfolio to drive growth. The decline in performance did not affect its share price negatively because of the company's potentials. Whatever may be the case, there are strong sentiments in the market that the company is still strong in almost all the parameters. Market analysts believe that the performance, exciting returns and good management among other attributes have favoured and earned it high stock value. It was listed on the Nigerian Stock Exchange in 1965 and is currently the highest valued stock in the breweries sub-sector.

7-UP Bottling Company
 
Seven –Up Bottling company's stock has appreciated by 23% or N9.00 per share this year from N39.00 to N48.00 per share as at last Friday. The company targets a Turnover of N16.5 billion and Profit after tax of N661.16 million in the Q3 which will end December 31, 2011.
Even though there is visible contraction in the market, the company's financials for the period ended March 31, 2011 shows that it grew its turnover by 24% to N51.098billion from N41.069billion in 2010. Its Profit after tax also rose by 29% to N2.277billion from N1.758billion.
 The Company has been competitive.  The company's financials for the period ended March 31, 2010 shows that the turnover rose to N41.069billion in 2010, representing an increase of 17% over the previous year. Its profit after tax rose by 23.7% from N1.529billion in 2009 to N 1.892billion in 2010.

Investors appear to be impressed with its performance. More interesting is that BH 10-year survey of company returns in capital gains revealed that its shares returned about 777.3% to shareholders. Its stock appreciated by 777.3% from N4.90 per share in December 31, 2001 to N42.99 as at February 14, 2011. The company, surprisingly, beat others, which were believed to be stronger to emerge tops just behind UACN Plc.  Details revealed that while Nestle Nigeria followed 7-UP Bottling Company Plc with 542% capital gains in ten years; Guinness gained 503.4%; Flourmills Nigeria Plc  389.3%, Berger Paints Plc 311.9% ; UACN Property Development Plc 272.3%; Total Nigeria Plc 223.9%; PZ Industries 200.1% and G T Bank Plc 194.8%.

Nevertheless, analysts believe that the conservative company is formidable. The company, however, paid dividend of 32kobo in 2000; 40kobo in 2001; 60kobo in 2002; 75kobo in 2003; 100kobo in 2004; 125kobo in 2005; 125kobo in 2006; 130kobo in 2007; 150kobo in 2008; 150kobo in 2009 and 175kobo in 2010. The company has also displayed a mixed trend in the growth pattern of its profit after tax (PAT). It achieved a PAT of N375.820million in 2000; N397.441million in 2001; N1.151billion in 2002; N1.382billion in 2003; but it dropped to N1.143billion in 2004. Its PAT further fell to N954.2million in 2005 and rose to N1.167billion in 2006; N1.219billion in 2007; N1.608billion in 2008; N1.529billion in 2009 and N 1.892billion in 2010.

TRANSCORP

Those who have followed the history of Transnational Corporation of Nigeria (Transcorp) will be surprised at the level of price appreciation it has recorded. This year alone, Transcorp has gained 40%, and risen from N0.50 per share in January 4, 2011 to N0.70 last Friday. Shareholders are excited at the sudden change of company's fortunes and impressive outlook. Investors are even more excited that at this time of unremitting Bearishness, their stock has achieved such traction.
When HEIRS acquired 2.5billion shares of Transcorp its share price appreciated to N1.33 per share in April 7, 2011 after maintaining a steady 5% daily limit rise from N0.50 in March 1, 2011. However, the stock has deflated by 47% from the peak as at March to N0.80 per share last Friday. But many have predicted that its share price will hit N5.00 per share before end of year. The company which did not declare profit for a long time succeeded in doing so last June. Transcorp grew its turnover by 12% in the Q2 ended June 2011 to N1.249billion from N1.114billion in the corresponding period of 2010. Its Profit after tax, also surged by 46% to N547million from N375million. Whereas its working capital is negative at N1.01billion its net asset value stood at N20.259billion.  Further details reveal that its audited result for the year ended December 31, 2010 achieved an increase in turnover by 7% to N13.927billion from N12.995billion in 2009. The company's profit after tax rose by 339% to N5.389billion from N1.226billion while net asset value stood at N26.638billion.The Company had recorded a loss of N8.95billion in 2008.

Analysts argue that these companies are not facing as much challenges as the financial sector, especially in recent times, an indication that the bearish trend may not be affecting its stocks. Commenting on the issue, a market analyst, Mr. Olisa Egbunike, believes that the nature of the products of some of the companies ensures that they are always in high demand. This according to him enhances their bottom line. He explained that investors are dumping the shares of financial industries for more viable stocks like the manufacturing companies.

National coordinator, Independent Shareholders Association of Nigeria (ISAN), Chief Sunny Nwosu, reckons that these companies deal in products of daily use and are in high demand. He noted that apart from their shares being limited, investors see them as 'a must hold stocks' and are often not interested in trading them daily.
Similarly, Mr fred Nwaogazi, a big investor in the blue chips thinks that these stocks are going to record significant capital gains this year. They are formidable firms with track records of good antecedents.