FOOD BASKET STOCKS enriching investors in Nigeria   


August 15 (Lagos) - Food Company stocks in the Nigerian stock market are seeing a kind of rally that can put any New York Stock Exchange rally to the test. Yes we are officially in that territory and newer investors have been seeing the kind of gains that investors in some of the biggest technology stocks of USA witness. 


In Nigeria - we did it with food. 


Food stocks have been the "diamond hands" in the Nigerian stock market. Food inflation in the region of 20% is sending prices for eatables higher as the ingredients become more expensive and CBN chokes the supply through forex controls. 


Food companies also become more profitable in such a case because they are able to pass on that higher cost to their consumers. At the end the buying power of consumers is getting eroded as a result of the forex related inflation that has been applied upon Nigerians. 


So food companies shares also become more valuable as a result of that price increase. We will be updated our numbers soon but the recent surge in food basket stocks bring back memories of the collapse these stocks witnessed in the 2015-2020 period. These companies bottomed out over the past year and are now enriching investors who got in during the past year. If the rally continues those new investors are about to witness multi bagger returns. 


1) UACN used to be above N 60 consistently and is now trading at N 10 levels and is up almost 100% over the past year. The Company seems to coming back from dead after spinning off its real estate business. 


2) UNILEVER used to be in N 30s and now is at N 15 and that is after a serious recovery. This stock has suffered due to management related issues over the past few years. 


3) HONYFLOUR - This stock used to around N 9 in 2012 is now at N 2.00 and is up more than 100% over the past year. The Company paid a dividend to its investors last year which sparked investors interests. 


4) FLOURMILL - This one used to be above N 100 at one point before they diluted shareholders massively,  and is now at N 30 still up 60% over the past one year. Company has been paying a steady dividend to its investors and it is one of the favorites of the dividend investors group in Nigeria. 


So as we can see, investors in these stocks have have laughing to the Bank all the way this year. These food stocks have been better than buying Dollars which harms our own currency. 


The gains may still be coming because the way inflation is out of control and showing little signs of falling (except on a higher base) , food prices will stay elevated. 


As we update our numbers we will share more insights into these companies individually.



reporting for easykobo.com on Sunday, August 15 2021 from Lagos, Nigeria

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