This post is all about stock analysis
I am learning this alongside you. So I will teach what I know and what I practise simply and honestly.
What is stock analysis?
Before you buy any share you need to evaluate whether that company is worth buying. That evaluation is called stock analysis. There are two main types.
Fundamental analysis — Looking at the financial health of the company. Is it profitable? Does it have debt? Is it growing? Does it pay dividends? This is what long term investors like me focus on primarily.
Technical analysis —Looking at price charts and patterns to predict where the price might move next. This is more for traders who buy and sell frequently. As a long term investor I use this lightly mainly to identify when a stock has pulled back to a good entry price.
Fundamental Analysis — What to Look For
These are the specific things I check before buying any Nigerian stock.
1. Revenue and Profit — Is the company making money?
You want to see consistent revenue growth over multiple years and consistent profit. Not a one-off good year. Sustained profitability. A company that makes profit year after year is a company with a genuine business model.
Where to find it ...the company's annual report published on the NGX website. Your stockbroker app may also display this.
2. Earnings Per Share — EPS
This tells you how much profit the company made per share. The higher the EPS the more profitable the company is per unit of investment. You want to see EPS growing year over year.
3. Price to Earnings Ratio — P/E Ratio
This compares the current share price to the company's earnings per share. A lower P/E ratio can suggest a stock is undervalued, you are paying less for each naira of earnings. A very high P/E can mean the stock is expensive relative to what it is earning.
Example — if a stock trades at ₦100 and its EPS is ₦20 the P/E ratio is 5. If another stock trades at ₦100 but earns only ₦5 per share its P/E is 20. The first stock is cheaper relative to its earnings.
4. Dividend History
Does the company pay dividends consistently? A company that has paid dividends for ten or more years without interruption is a company that is genuinely profitable and confident enough to share that profit with shareholders. This is one of my primary criteria for every stock I hold.
5. Debt Level
How much debt does the company carry relative to its equity? A company drowning in debt is a risk especially in a high interest rate environment like Nigeria's. Look for companies with manageable debt levels.
6. Return on Equity — ROE
This measures how effectively the company is using shareholders' money to generate profit. A higher ROE generally means better management efficiency. Above 15% is considered good.
Technical Analysis — The Basics
Even as a long term investor there are two things I look at on the chart.
Support levels — the price floor. The level where a stock has repeatedly stopped falling and bounced back up. Buying near a support level means you are buying at a historically low price for that stock.
Resistance levels — the price ceiling. The level where a stock has repeatedly struggled to go higher. If a stock breaks through resistance convincingly it often signals further upward movement.
I used this when I bought Stanbic IBTC at ₦160 during its recent pullback. I identified that the price had pulled back significantly from its recent high and was approaching a support zone. That is patient entry using basic technical awareness.
The Tools and Websites to Use
NGX official website — ngxgroup.com Source: Nigerian Exchange Group https://share.google/ImdCINpEgmd8TM2Gu
This is your primary source for everything Nigerian stock market. Company financials, annual reports, dividend announcements, corporate actions, regulatory filings. If it is official it is here first. Always verify information here.
NGX Data Analytics — ngxgroup.com/exchange/data/data-analytics
NGX has partnered with a data analytics company to provide fundamental and technical analysis directly on their platform. You can access company overviews, financial ratios, balance sheet analysis, and technical momentum scores. This is powerful and underused by most retail investors.
TradingView — tradingview.com
Source: TradingView https://share.google/yowuoQ6kiq4YhTxDa
Search for any Nigerian stock by its ticker symbol ZENITHBANK, GTCO, MTNN, ARADEL and so on. You will see the full price chart, moving averages, volume, and technical indicators. You can also read analysis posted by other investors on Nigerian stocks. Free to use at the basic level.
Stockanalysis.com
Source: Stock Analysis https://share.google/p80HN9bqHJFjh0pD5
Search Nigerian stocks here for financial data revenue, earnings, dividends, P/E ratio, EPS history. Clean interface and easy to read even for beginners.
Your stockbroker app
Both Afriinvestor 2.0 and the Stanbic IBTC app display basic stock information including current price, 52-week high and low, and recent performance. Use these for quick checks.
Bamboo app
Since you're already on Bamboo, the app itself provides some company information. But supplement it with the websites above for deeper analysis.
My Simple Checklist Before Buying Any Nigerian Stock...
Is the company consistently profitable?
Does it pay dividends regularly?
Is the P/E ratio reasonable compared to sector peers?
Is the debt level manageable?
Is the current price near a support level or has it pulled back from a recent high?
Is the sector essential to the Nigerian economy?
If most of these answers are yes, it is worth a closer look.
One final important reminder..
Analysis reduces risk. It does not eliminate it. No stock is guaranteed. The goal of analysis is to make an informed decision, not a perfect one.
Start simple. Read one annual report. Look at one P/E ratio. Check one dividend history. Build the knowledge one stock at a time.
That is how I started. That is how we all start.
The more you learn the more confident your decisions become.
#NigerianStockExchange
#ZenithBank
#NGXStocks
#NigerianInvestor
#WealthBuilding
#FinancialLiteracy
#DiasporaInvesting
I am learning this alongside you. So I will teach what I know and what I practise simply and honestly.
What is stock analysis?
Before you buy any share you need to evaluate whether that company is worth buying. That evaluation is called stock analysis. There are two main types.
Fundamental analysis — Looking at the financial health of the company. Is it profitable? Does it have debt? Is it growing? Does it pay dividends? This is what long term investors like me focus on primarily.
Technical analysis —Looking at price charts and patterns to predict where the price might move next. This is more for traders who buy and sell frequently. As a long term investor I use this lightly mainly to identify when a stock has pulled back to a good entry price.
Fundamental Analysis — What to Look For
These are the specific things I check before buying any Nigerian stock.
1. Revenue and Profit — Is the company making money?
You want to see consistent revenue growth over multiple years and consistent profit. Not a one-off good year. Sustained profitability. A company that makes profit year after year is a company with a genuine business model.
Where to find it ...the company's annual report published on the NGX website. Your stockbroker app may also display this.
2. Earnings Per Share — EPS
This tells you how much profit the company made per share. The higher the EPS the more profitable the company is per unit of investment. You want to see EPS growing year over year.
3. Price to Earnings Ratio — P/E Ratio
This compares the current share price to the company's earnings per share. A lower P/E ratio can suggest a stock is undervalued, you are paying less for each naira of earnings. A very high P/E can mean the stock is expensive relative to what it is earning.
Example — if a stock trades at ₦100 and its EPS is ₦20 the P/E ratio is 5. If another stock trades at ₦100 but earns only ₦5 per share its P/E is 20. The first stock is cheaper relative to its earnings.
4. Dividend History
Does the company pay dividends consistently? A company that has paid dividends for ten or more years without interruption is a company that is genuinely profitable and confident enough to share that profit with shareholders. This is one of my primary criteria for every stock I hold.
5. Debt Level
How much debt does the company carry relative to its equity? A company drowning in debt is a risk especially in a high interest rate environment like Nigeria's. Look for companies with manageable debt levels.
6. Return on Equity — ROE
This measures how effectively the company is using shareholders' money to generate profit. A higher ROE generally means better management efficiency. Above 15% is considered good.
Technical Analysis — The Basics
Even as a long term investor there are two things I look at on the chart.
Support levels — the price floor. The level where a stock has repeatedly stopped falling and bounced back up. Buying near a support level means you are buying at a historically low price for that stock.
Resistance levels — the price ceiling. The level where a stock has repeatedly struggled to go higher. If a stock breaks through resistance convincingly it often signals further upward movement.
I used this when I bought Stanbic IBTC at ₦160 during its recent pullback. I identified that the price had pulled back significantly from its recent high and was approaching a support zone. That is patient entry using basic technical awareness.
The Tools and Websites to Use
NGX official website — ngxgroup.com Source: Nigerian Exchange Group https://share.google/ImdCINpEgmd8TM2Gu
This is your primary source for everything Nigerian stock market. Company financials, annual reports, dividend announcements, corporate actions, regulatory filings. If it is official it is here first. Always verify information here.
NGX Data Analytics — ngxgroup.com/exchange/data/data-analytics
NGX has partnered with a data analytics company to provide fundamental and technical analysis directly on their platform. You can access company overviews, financial ratios, balance sheet analysis, and technical momentum scores. This is powerful and underused by most retail investors.
TradingView — tradingview.com
Source: TradingView https://share.google/yowuoQ6kiq4YhTxDa
Search for any Nigerian stock by its ticker symbol ZENITHBANK, GTCO, MTNN, ARADEL and so on. You will see the full price chart, moving averages, volume, and technical indicators. You can also read analysis posted by other investors on Nigerian stocks. Free to use at the basic level.
Stockanalysis.com
Source: Stock Analysis https://share.google/p80HN9bqHJFjh0pD5
Search Nigerian stocks here for financial data revenue, earnings, dividends, P/E ratio, EPS history. Clean interface and easy to read even for beginners.
Your stockbroker app
Both Afriinvestor 2.0 and the Stanbic IBTC app display basic stock information including current price, 52-week high and low, and recent performance. Use these for quick checks.
Bamboo app
Since you're already on Bamboo, the app itself provides some company information. But supplement it with the websites above for deeper analysis.
My Simple Checklist Before Buying Any Nigerian Stock...
Is the company consistently profitable?
Does it pay dividends regularly?
Is the P/E ratio reasonable compared to sector peers?
Is the debt level manageable?
Is the current price near a support level or has it pulled back from a recent high?
Is the sector essential to the Nigerian economy?
If most of these answers are yes, it is worth a closer look.
One final important reminder..
Analysis reduces risk. It does not eliminate it. No stock is guaranteed. The goal of analysis is to make an informed decision, not a perfect one.
Start simple. Read one annual report. Look at one P/E ratio. Check one dividend history. Build the knowledge one stock at a time.
That is how I started. That is how we all start.
The more you learn the more confident your decisions become.
#NigerianStockExchange
#ZenithBank
#NGXStocks
#NigerianInvestor
#WealthBuilding
#FinancialLiteracy
#DiasporaInvesting