Bancorp MD: I buy stocks based on their fundamentals — not emotions

Dolapo Ashiru, managing director (MD) at Bancorp Securities Limited, says his investment philosophy relies on fundamental analysis to guide stock selection and not based on emotion.

Speaking on Thursday during a seminar organised by Bancorp, Ashiru advised investors to adopt a patient, diversified approach, urging them to purchase a list of stocks.

He said sectors key to the Nigerian economy must be considered when building a portfolio in the country.

“If I want to build a portfolio, I must look at financial services, and I must look at telcos,” the MD said.

“So, I must look within the universe of our banks, and universe of our telecommunications companies, especially MTN.

“I look at industrial goods; the cement makers, the likes of Dangote Cement, Lafarge WAPCO, and BOA.

“I also go to fast-moving consumer goods. I look at Nestle. Although Dangote Sugar is not doing well now, but ultimately it will bounce back. It’s not doing well for particular reasons I don’t want to go into.

“I would look at Cadbury. I will look at also the brewers, I will look at Nigerian breweries. I would also look at petroleum and go upstream.

“I would look at Seplat. I look at Aradel. For now, it will be Aradel.

“That’s how I build my portfolio. The price you enter is key also, but that’s how I would build my portfolio on those stocks.”

‘BEST BET IS TO MIRROR NGX30 TO BUY STOCKS IN NIGERIA’

Ashiru said to buy stocks in Nigeria, the best bet is for investors to mirror the NGX30, which shows the top 30 capitalised stocks in the Nigerian Stock Exchange (NSE).

He explained that in the country, the index fund normally used to benchmark portfolios is called the NGX30, and its holdings are periodically reviewed and updated.

“Wherever the market is, that fund always meets the market. So, instead of trying to beat the market every year, which is impossible, the best thing is that you mirror a fund. It’s cheaper,” the MD said.

“It’s more effective. A fund is well diversified as it has stocks from different sectors. They have banking stocks, agricultural stocks, consumer goods stocks, and industrial stocks. It’s well diversified, so an index fund is the way to go.”

Ashiru advocated for fundamental analysis over emotional buying, saying successful stock selection is a patient game of discipline and diversification, which involves identifying resilient, high-value assets.