The NGX All-share Index recorded an impressive performance with a YtD gain of 45.90% closing at 74,773.77 points in 2023, which stands in sharp contrast to the 19.98% gains achieved in 2022.
This year, the market has been on an upward trajectory, with the NGX All-Share Index (NGXASI) already achieving 87% YtD return from 2023.
Correspondingly, these SWOOT companies, aligning with the overall market trend, have seen their YtD valuations rise by at least 50%.
Geregu Power Plc (GEREGU +150.63% YtD) Dangote Cement (DANGCEM +114.66% YtD), BUA Foods Plc (BUAFOODS +96.43% YtD), and First Bank (FBNH +68.15% YtD).
These companies, with market valuations exceeding one trillion Naira, have all seen their stock prices rise by at least 50% this year.
Geregu Power Plc: Up 151% YtD
GEREGU is one of the stocks that is on track to double its Year-to-Date gain from 2023 in 2024.
In 2023, the stock recorded an impressive gain of 168%, and as of now in 2024, it has already gained 151%, representing about 89.8% of 2023 YtD gain.
Since its listing in October 2022, the share price has gone up by 727% from N120.9 per share to N1,000. Revenue has grown by 74% in the past year. The company is also profitable, with a double-digit percentage growth.
Despite the impressive earnings growth, the fact that Geregu’s stock is currently trading at 155 times its trailing twelve months earnings per share (EPS) suggests that investors are willing to pay a premium for the company’s shares.
This indicates strong demand for the stock, supported by expectations of continued growth and performance in the future.
Dangote Cement up 115% YtD
Dangote Cement’s share price has surged by 115% this year, which represents about 508% of its 2023 YtD gain.
The stock reached a new 52-week high of N763.00 on February 16, 2024, indicating strong upward momentum and investor confidence in the company’s performance.
Dangote Cement’s relatively strong financial performance in 2023 with a 36% increase in revenue and 50% increase in dividend likely contributed to the share price rally.
Proposing a dividend of N30 per share at a period when many firms are declaring losses is an indication of the resilience of Dangote Cement and the prospects it holds for investors.
Moreover, strategic initiatives such as asset optimization and the adoption of an “export to import” strategy in West and Central Africa enhanced investor confidence.
Also, the company’s ability to contribute significantly to foreign exchange generation for the country likely played a significant role in driving the share price rally.
These initiatives are expected to continue influencing the company’s future performance positively.
BUA Foods up 96.43% YtD
With a YtD gain of 96.43%, almost 50% of 2023 YtD gain already recorded this year, the company is likely to beat its 2023 performance. In 2023, it achieved a gain of 198% YtD.
Since its market debut at around N48 in 2022, BUA Foods’ shares have been on a steady upward trend, reaching N379.90 per share.
The salt segment, a major revenue driver for the FMCG company, continues to experience high demand, offering prospects for sustained revenue growth, improved profitability, leading to positive investor sentiment.
The first quarter of 2024 presents a critical test. Investors are anticipating sustained growth, leading them to assign a premium to the stock, as evidenced by its price-to-earnings ratio of 61x; higher than the sector average ratio.
FBNH Up 61% YtD
FBNH has been uptick this year, hitting a YtD gain of 61%, progressing towards doubling its gains from 2023. This places it among the top performers in the banking sector.
Last year’s surge can be attributed to the announcement of billionaire investor Femi Otedola as a majority shareholder of the bank, which garnered substantial investor interest.
Additionally, FBNH received recognition from Euromoney as the Best Corporate Bank in Nigeria for 2023, further bolstering investor confidence.
The recent appointment of Otedola as the chairman of the bank, along with other directors, signaled a shift towards a governance model that values diverse, cross-sectoral experience.
This move is likely to impact investor sentiment and could influence share price movement positively.
Moreover, FBN Holdings posted impressive financial results in 2023, with profits growing by 129%. This performance translated to earnings per share reaching N8.56.
However, the price-to-earnings ratio of 4.42x, which is one of the highest among tier-1 banks, suggests that the stock may be relatively expensive compared to its earnings.
Investors are paying a premium for each unit of earnings generated by the company, which may have implications for the share price, especially if the bank fails to grow to sustain the investor expectations.
