Investors advised to consider Lafarge, Forte Oil, Julius Berger for high returns

Investors desirous of high returns are advised to consider Lafarge Africa, Forte Oil and Julius Berger Nigeria Plc. The Afrinvest Securities and GTI Securities recent investment reports shows that Lafarge Africa, Forte Oil and Julius Berger Nigeria have potential for high returns in the period ahead.

Afrinvest Securities report shows the cement company has an upside potential of 42.4 per cent, a direct reference to extent of capital gain that could accrue to investors in the company. Furthermore, the recent debt restructuring, energy source diversification and Nigeria price action remain positive drivers of forward earnings for Lafarge Africa.

Lafarge Africa’s last audited report outperformed analysts estimates on key earnings metrics showing that earnings had also stayed resilient in 2017. Sales grew by 55.1 per cent and reversed its negative bottom-line with a pre-tax profit of N9.45 billion in the first quarter of 2017 as the cement company adopted alternative and logistics efficiency to drive growth.

The interim report and accounts of Lafarge Africa for the three-month ended March 31, 2017 reveals that sales rose to N81.31 billion in first quarter 2017 as against N52.42 billion recorded in the first quarter of 2016. Gross profit increased by 168.5 per cent from N7.78 billion in first quarter of 2016 to N20.89 billion in first quarter of 2017.

The balance sheet of the cement group gained increase by improvement in the assets (both fixed and current. Total assets rose to N523.76 billion by March 2017 from N502.49 billion recorded by the period ended December 31, 2016. Total equity funds also increased from N248.95 billion by December 2016 to N263.38 billion by March 2017.

The GTI Securities report spotted Forte Oil and Julius Berger Nigeria as the best stocks for high returns on investment within a 12-month period. The report reveals that Forte Oil is likely to generate capital appreciation of about 250 per cent from the current stock price to N170.41 by the end of the period.

Forte Oil has 51 per cent stake in a 414 megawatts gas-fired independent power plant, which is selling power to the Nigerian power grid on a guaranteed basis. The power plant is significantly adding to the group’s top-line. The power generation revenue increased by 118.61 per cent year-on-year and accounted for 19.79 per cent of total revenue in first quarter of 2017 compared to 8.39 per cent of total revenue in the first quarter of 2016.

Julius Berger Nigeria, by the report could post a return of about 117.80 per cent within the period as the share price of the construction firm is expected to rise from its current level to close the period at about N70. Julius Berger Nigeria by the report has a huge public sector portfolio which includes several high-profile construction projects across the country.



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