Safety Stock Picks: Diamonds in The Rough

Despite persistent downward pressure on the Stock Market over the past month, certain stocks have proven to be resilient to bearish tendencies on the market.

Our analysis has led us to term such stocks “safety stocks”, these are stocks whose prices refuse to be badly beaten by the sell-side pressure on the Nigerian Stock Exchange, these stocks don’t seem to realize there is a predominant sell side fog hanging  over the market and they form our periodical highlight list. We focus largely on blue chip companies although we may highlight any stocks that have performed outstandingly over the similar period.

GTBank is our favorite of the banking sector, over the past month whilst the sector has declined by an average of 5%, the company’s stock has risen 17.5%, outperforming its peers by over 400%, and outperforming the Index by close to 600%.
GTBank may still be off -18% from the onset of the year, but the stock is clearly regaining its footing as investors find it to be a safe haven in terms of performance and resilience in the down market.

Across the Consumer Goods space, three stocks tickle our fancy, Honeywell Flour Mills, Nigerian Breweries, and Flour Mills up 6.9%, 6.6% and 6% over the past one month. Not staggering numbers but when compared to their peers in the sector down a cumulative average of 7%, the numbers begin to make more sense for investors in this sector. For instance Dangote Sugar is down over 25% in the last one month.  In the last month, the trio of Honeywell, Flour Mills and Nigerian Breweries are outperforming their sector by 200% and outperforming the stock market by 154%.

Dangote Cement is leading the infrastructure sector with a performance of 7.4% over the past one month, relative to a sector wide performance of -8%. Dangote is outperforming the sector by 188% and outperforming the NSE by 309%.

Forte Oil is the stock of the moment. Over the last one month, it has appreciated over 40%. That’s a jaw dropping performance. Relative to its peers, its performance has been astronomical, the sector has performed an average of 2% over the past month. Forte oil is outperforming the sector by 1,611%.  Although it may not be one of the most liquid stocks on the stock exchange, it is definitely a stock to watch.

2 Comments

1. 

   Oketuk

   November 20, 2011 at 10:45 pm

   really Forte oil
2. 

   oguns

   November 21, 2011 at 12:43 am

   YES FORTE OIL. Believe it belongs to Femi Otedola