Last week, the Nigerian stock exchange All Share Index closed with a positive gain of 15.55% year to date and is on track to close on a positive note this year.
In the past week, investors traded in a turnover of 2.067 billion shares worth N22.636 billion in 27,187 deals compared to a total of 1.909 billion shares valued at N23.610 billion in 23,578 deals in the previous week. With the rising volumes and market index, it is a clear indication that we are in a bullish run.
The top gainers this week were Coronation Insurance +10%, Regency Assurance +9.09%, Consolidated Hallmark Insurance +8.82%, and none of these stocks are in our portfolio.
The stock we recommended in October; CAP Plc is already up 24%, but still a long way off our exit return of 51.4%. We also recommended some stocks like Africa Prudential, GTB Lafarge, MTNN, Nestle, Stanbic IBTC, United Capital, Vitafoam, and Zenith bank, which were able to hit and cross the target exit price by a significant margin.
However, let’s take a deep dive into some of the insurance stocks in our portfolio.
Mansard insurance is an insurance stock in our portfolio that posted a year to date earnings per share of 50.7 kobo, up from 18.37 kobo in the same period last year, with a share price down by 9% year on year. The good is that net insurance premium was up 14% during the quarter. The company posted an underwriting profit of N2.4billion in the quarter, up by 30% from the same period last year. The bad is that Mansard Insurance did not record any significant gain in income from investment, which is a source for concern and also operating expenses rose slightly during the quarter topping N2.2 billion. The 4th quarter often records the highest operating expenses for Mansard, and suspect it could grow as high as N3 billion.
It released its third quarter result showing earnings per share of 45 kobo compared to 65 kobo in the same period last year. The share price was, however, up by 7% last week, and down 12.4% since we recommended it in our portfolio. The good is that its net premium income was up 24% for the quarter year on year to 12.9 billion, while operating income fell by a whopping 65% to N870 million during the quarter. On the other end, the company posted a mega underwriting loss of N11.5 billion, as it paid more claims than premium received in the quarter. With earnings per share down so far this year, it is unlikely that the company will recover enough in the 4th quarter to avoid year on year earnings drop. Their current share price of 99kobo is still relatively cheap and undervalued in my opinion.
Finally, next week, we will continue with this review and focus on the rest of the stock in our portfolio with a special focus on telcos and industrials.
To get more in-depth analysis and review of companies in the capital market and in our portfolio, subscribe to our stock select newsletter here, as we discuss the Telecommunication and Manufacturing Industry.
There is a wealth of information that should help decide whether you should buy a stock or not, and how long you can hold on to it. Our recommendation is based on the information we currently have and is wholly the opinion of Ugodre Obi-Chukwu.
Nairametrics does not own some of the stocks recommended and may not purchase them despite including them in our Stock Select Portfolio. Ugodre does not also own all the stocks he recommends.
This newsletter is an investment guide and as such, you should conduct extra analysis before deciding whether to buy, sell, or hold a stock. The decision to buy, sell or hold a stock is solely yours.