The just ended Young Investors Stock Pitch Competition brought together young people, who have interest in finance and investment from across Ghana, to conduct an analysis on selected companies listed on the Ghana Stock Exchange; and further recommend whether investors should either buy shares in the company, sell their holdings or hold on to their shares in the company.
Some of the highlights of the pitchers’ presentations are summarized in this write up to serve as a guide for investors in 2021 and beyond. The pitchers formed teams and conducted their presentations before a panel of investors, who also served as judges.
Below are some highlights:
The intrinsic price of MTN Ghana stands at GHp93. The current price of GHp63 puts the stock in a strong buy position for the stock. The continuous profitability is one reason for investors to remain confident in the company.
Both teams jointly recommended a buy for GCB. TK Research however recommended a hold for shareholders who are contemplating on selling their shares. Both teams were of the view that GCB is currently trading below its fair value of about GHS 6.00. A strong historical trend of earnings with a solid projected figure puts the stock also in a strong buy position.
These teams are of the view that Ecobank Ghana Ltd is one of the stocks expected to produce some good returns for investors. With an EPS of 1.38, PE Ratio of 3.6x and an intrinsic value of GHC9.83, there is no doubt that the share price will remain same in the coming months.
Team Excellence’s analysis also concluded on a buy for Total Petroleum Ghana which according to their analysis is trading at 70% below its fair price. The company’s earnings having grown at about 18% year on year and a dividend yield of 6.55% are some of the indicators that puts Total Petroleum as one of the top stock market picks.
The share price of Guinness Ghana Breweries Ltd is expected to shore up in the coming months partly due to the resilience shown especially in this COVID period by bagging a net profit of GHS20.6M in Quarter 3 of 2020. An intrinsic value of GHS3.23 provides a great opportunity for investors to look at considering the current price of Ghp90.
“…is this what the bank is truly worth?”, the Wealth Knights began with their presentation. From their analysis, the fair price of the bank should be in the excess GHS50 per share; current price is GHS15.30. The company’s operating income has grown by about 11% on average in the last five years. Dividend Per Share of GHS1.04 dividend and yield 6.88% pushes Standard Chartered Bank as a top pick. Basic Earnings per Share grew from GHS1.49 to GHS2.54 September 2019 to September 2020.
Young Investors Network’s Position
In our analysis titled “The Ghana Stock Exchange Is Set to Rebound” and “The GSE: How the Banks Have Performed in the Last Five Years”, published in June 2020 and September 2020 respectively by this media network, we brought to light some compelling reasons to support the view that prospects in 2021 and beyond are high for the Ghana Stock Exchange. We are therefore not surprised that these young people have come out with similar conclusions.
We recommend that investors speak to their stock brokers and investment advisors to seek further information about investing in the Ghana Stock Exchange before making any decision to hop into the market.
The Stock Pitch Competition
The Young Investors Stock Pitch Competition was designed to encourage participation in the market and enhance deeper understanding in GSE’s activities. The Young Investors Network, with the support of the Ghana Stock Exchange, UMB Stockbrokers Ltd and CITI TV, has began activities to improve the participation of many young people in this program.
Young Investors Network (YIN) is a financial education organization with a commitment to educating the youth in financial literacy, business skills and dedicated to preparing the next generation of investors. Its mission is to inspire youth to be outstanding investors – investors in companies, investors in their communities, and investors in themselves. Please visit www.younginvestorsghana.org for more.