Geregu Power Steadies with Overbought Signs
Geregu Power Plc has seen its market valuation rising steadily for months. The company stock actually rallied against the market direction in the past months. However, the market has pressed a pause button as the power company missed the share-buying festival last week.
The power company that handles electric power sales through the Nigerian Bulk Electricity Trading Plc to distribution companies in Nigeria was unusually quiet over the last seven days of trading sessions.
Last week, the sound of economic reforms pushed the market index higher, and most listed companies’ shares were re-rated.
In a week, the stock market gained about N1.7 trillion but Geregu Power Plc failed to feature, suggesting that the company shares might have already hit an overbought button.
At N312 per share, the power generation company’s valuation settled at N780 billion on Friday’s close, from N250 billion in Oct. 2022 when it came to the market.
With the earnings outlook ahead, some analysts think the share could pick u from where it stopped. On the other hand, large selloffs could correct the overbought aspects of its market performance.
The core driver of the share price uptrend; for some stockbrokers is improved sentiment, and earnings expectation, though its profitability remains a top priority for some investors.
However, others may look at the company’s capital expenditure size and quality before taking positions. For the third quarter, the company estimates that its profit will settle at N3.670 billion while revenue is expected to print above N15 billion.
A stock that is overbought trades at a price above its intrinsic or fair value. This means it doesn’t trade at its true worth. Rather, it’s trading at a price that’s much higher than what it should be. #Geregu Power Steadies with Overbought Signs