This medium priced stock has hit a year high amidst a bear market

The Nigerian Stock Exchange (NSE) ended the month of October on a bearish note, down 0.75%. Year to date, the All Share Index is down 15.11%. Amidst the blues, some stocks have appreciated.

Newrest ASL today hit a year high of ₦6.6 per share and is up 10.92% year to date.

Likely driver

Newrest has a vast improvement in its top, and more especially, its bottom line at a time when most firms are recording flat results and the economy, as a whole, has remained sluggish.

Results for the nine months ended September 30, 2018, show that revenue increased by 42% from ₦2.8 billion in 2017 to ₦4.2 billion in 2018. Profit before tax jumped from ₦189 million in 2017 to ₦1 billion in 2018.

Nairametrics had, at about this time last year, reported the stock been bearish following the sale of its Rwandan unit, which was a key earner.  The company, however, appears to have surmounted those challenges.

Will it go higher or pull back?

A year to date appreciation of 10.92% leaves the stock with some room to go further.  A thin float means that the stock could go much higher, perhaps hitting a 5 year high of ₦7.87.

On the flip side, investors could decide to rake in profits as the stock was one of the best performing last month, appreciating by 17.86%.

What’s in for investors?

Investors expecting a bumper dividend may be disappointed as the company has always had a low payout ratio. For the 2017 financial year, Newrest ASL paid a final dividend of ₦0.18 per share, from earnings of ₦0.68. For the 2016 financial year, the firm paid 17.7 kobo per share.

The firm made N1.73 as earnings for the nine months ended September 30, 2018, a 296% increase from the N0.49 made in the comparative period of 2017.

About Newrest ASL Nigeria Plc

Airline Services Limited (now known as Newrest ASL Nigeria) was incorporated as a private limited liability company on December 6, 1996. The company became a public limited liability company on February 26, 2007, and was listed on the Nigerian Stock Exchange on July 25, 2007.

Newrest ASL’s principal services are the provision of catering services to international airlines operating in the country. The company also operates VIP lounges at the Muritala Mohammed International Airport (MMIA) Lagos and the Nnamdi Azikiwe International Airport Abuja. In addition, its subsidiary, Newrest ASL Oil and Gas Logistics Ltd, provides oil and gas catering and logistics services to companies operating in the oil and gas sector in the country.

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Author: see naija

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