Business
Cheap stocks for strategic entry as market downtrend opens new opportunities
The Nigerian equities market has been on a downward trajectory in recent weeks, largely driven by profit-taking by investors. The bearish run persisted last week as the All-Share Index (ASI) fell by 2.42 per cent week-on-week. Despite this pullback, the market has still delivered an impressive 39.64 per cent return year-to-date, with the ASI closing at 143,722.62 points and market capitalisation at ₦91.415 trillion.
The current decline has created fresh entry points for discerning investors. With several counters trading below their recent highs, bargain hunters now have another window to accumulate fundamentally strong stocks at discounted prices.
Improving macroeconomic indicators further strengthen the case for strategic positioning. Inflation has eased to 16.05 per cent, the exchange rate remains relatively stable, and external reserves have recorded a notable uptick. These positive markers suggest the ongoing correction is temporary. Analysts also expect the Monetary Policy Committee (MPC) to implement another cut in the Monetary Policy Rate (MPR), which could boost market liquidity.
Below are selected equities currently trading at attractive levels as investors position ahead of the Q4 2025 earnings season:
Africa Prudential (AFRIPRUD)
Current price: ₦13.50
52-week range: ₦4.50 – ₦18.15
Trading 25.62% below its 52-week high
Uptrend potential: ~26%
Dividend expectation: Final dividend of about 60 kobo (after an interim dividend of 10 kobo for H1 2025)
United Capital (UCAP)
Current price: ₦16.90
52-week range: ₦13.15 – ₦24.60
Trading 31.3% below its 52-week high
Uptrend potential: ~31%
Dividend expectation: Final dividend of about 50 kobo (after 30 kobo interim)
Access Holdings
Current price: ₦20.50
52-week range: ₦19.90 – ₦28.95
Trading 29.2% below its 52-week high
Uptrend potential: ~29%
Dividend expectation: At least ₦2.05, possibly higher
Zenith Bank
Current price: ₦59.75
52-week range: ₦43 – ₦78.50
Trading 23.89% below its 52-week high
Uptrend potential: ~24%
Dividend expectation: Final dividend of about ₦4 (after ₦1.25 interim)
GTCO
Current price: ₦84.50
52-week range: ₦51.40 – ₦103.20
Trading 18.12% below its 52-week high
Uptrend potential: ~18%
Dividend expectation: ₦4 – ₦5 final dividend (after ₦1 interim)
FBN Holdings (First Holdco)
Current price: ₦30.60
52-week range: ₦23.55 – ₦37.50
Trading 18.40% below its 52-week high
Uptrend potential: ~18%
Dividend expectation: 60 kobo – ₦1 final dividend
Nigerian Breweries
Current price: ₦68.50
52-week range: ₦27 – ₦79.45
Trading 13.78% below its 52-week high
Uptrend potential: ~14%
Dividend expectation: Likely to return to dividend payout after moving past 2024 FX pressures
United Bank for Africa (UBA)
Current price: ₦36.90
52-week range: ₦30.50 – ₦50.55
Trading 27% below its 52-week high
Uptrend potential: ~27%
Dividend expectation: Final dividend between ₦2 and ₦3 (after 25 kobo interim)
NAHCO
Current price: ₦99.15
52-week range: ₦36.50 – ₦124.85
Trading 20.58% below its 52-week high
Uptrend potential: ~21%
Dividend expectation: About ₦5.94, same as 2024
Fidson Healthcare
Current price: ₦40
52-week range: ₦13.90 – ₦47
Trading 14.89% below its 52-week high
Uptrend potential: High
Dividend expectation: About ₦1
Why fundamentally strong stocks matter
A fundamentally sound stock is one backed by solid financials, competent management, good governance, competitive products and long-term earnings potential. Investors identify such stocks through fundamental analysis, which examines both macroeconomic trends and company-level indicators.
Key factors include:
1. Quality of management
Strong leadership is essential for long-term value creation. Investors should review management profiles, track records and insider behaviour, especially insider buying and long-term shareholding.
2. Corporate governance
Good governance fosters transparency, accountability and sustainable growth. It defines how power is exercised and how decisions are made.
3. Earnings quality and momentum
Consistent and improving earnings signal robust operational strength. Analysts often review several quarters to identify growth patterns.
4. Price behaviour
Certain stocks lead market recoveries after downturns. Understanding price trends helps investors enter at the right time.
5. Product strength and market dominance
Companies with strong, demand-driven products—like Dangote Cement in the cement industry—tend to deliver consistent returns.
6. Periodic review of fundamentals
No company remains fundamentally strong forever. Investors must reassess their portfolios every quarter to ensure positions remain aligned with evolving fundamentals.
