Nigerian investors reveal their favorite foreign-based stocks

The recent bearish trend in Nigeria’s bourse continues to raise concerns among investors, with many Nigerians shifting their portfolio investments to foreign stocks via trading apps, installed on their smartphones.

Nigerians’ rush to foreign stocks is largely attributed to the naira’s depreciation against major global currencies and the surge in foreign stocks in spite of the COVID-19 pandemic. Data credited to NASDAQ showed that American Index, the S&P 500, posted 20 new 52-week highs and no new lows, and Nasdaq Composite recorded 99 new highs and 18 new lows.

Nairametrics interviewed some investment experts, entrepreneurs, and corporate heads,  asking for their opinions on what foreign-based stocks they will invest in. Their responses were as insightful as they were diverse, ranging from leading U.S tech brands, to logistics businesses, and global consumer brands.

Adewale Yusuf, CEO Techpoint Africa

Investing in the stock market depends on your plan. Are you investing in the long-term or short-term? For the long-term. I will invest in Amazon, Microsoft, Apple, Google, Netflix, and Facebook.

All these companies are solving unique problems, and they have innovative leaders that would continue to think out of the box to drive consumer demands. However, the profit margin on these stocks won’t be high but will be consistent.

n the short-term, I will invest in Tesla, Square, Shopify, etc. These are good shares with high-profit margins on good days; however, you can lose money easily on them as well. So, the best thing is to know when to sell them.

They all have innovative leaders as well and they have unique solutions for the future.

With more than 170,000 users actually attending the online classes in the first week of lockdown, $LULU was able to rake in over 40% surge in digital sales last quarter especially from the demand of yoga mats.

The stock was trading below $135 during the market crash in March but has since been on an aggressive rebound, moving above $330 at the close of the market yesterday.

I think that the effect of the COVID-19 will be felt in a long time and I generally think LULU is one asset to hold for at least up till next year.

Thelma Ugonna Ohiri-Anyanwu, CFA, Banker

Apple: As of December 2019, Apple held a 49% share of the US smartphone market and also led in the tablet industry with a market share of 36.5%. it currently pays a quarterly dividend of 77 cents.

Chegg: This is an education company for the future and offers students numerous academic help services. With the virtualized education trend heightened by COVID-19, this app has great potential of growing its subscriber base from its current 3.9million users by 20%.

Microsoft (MSFT): There’s a lot of value to be gotten from this stock as Microsoft has been becoming less reliant on its office software suite and windows operating system for revenue. In Q2 its revenue from server products and cloud services grew by 30% while its revenue from Azure cloud services grew by 62%. It has also maintained quarterly dividend payments since 2004.

McDonald: This is by far the biggest fast-food chain by sales in the US and the most valuable food brand in the world in 2019. It has consistently increased its annual dividend payments every year since its first dividend payment in 1976 and paid a dividend of $4.73 in 2019 up from $4.19 in 2018.

Silas Ozoya, Managing Partner/CEO, SUBA CAPITAL

My favorites are dividend stocks in the aristocrats’ sector in the S & P 500. Real Estate (REITs), Health and Consumer Staples shares are my best picks. This is because people would always need real estate, health care, and consumer goods.

My portfolio currently has Vanguard for REITs, Johnson & Johnson for Health care, and Walmart for Consumer Staples.

So if you’re reading this, do your research first. Ask yourself why you want to invest in a particular stock or company in relation to your short term, medium, and long term goals.

Anthony Okafor, Ph.D., ACCA, Head, Investments & Strategy at Vyne Investment Partners

The dog days of summer are here and despite the long stretches of volatility in the global market, the remaining part of the year provides an enormous opportunity for growth stocks to thrive.

The trend favours mobile payment companies as one out of every five dollars spent is done via mobile payments. E-commerce and tech firms have experienced geometric growth in revenue since the beginning of COVID 19. Software firms present exciting opportunities as well.

Software is the new gold and has unseated hardware firms given the increasing use of cloud computing with most companies opting to work from home due to the pandemic. Advances in health-care, especially firms producing therapeutics or vaccines, make the health sector a high growth sector to watch.

Darlington-Morsi Onyemaka Cofounder Quba Exchange

I’m bullish on Lululemon Athletica ($LULU).

The COVID-19 imposed lockdowns have caused stirs in nearly every industry and one particular space that has been greatly affected but not paid deserving attention is fitness.

Lululemon has managed to keep its customers connected through live workout sessions hosted on social media platforms like Facebook and IG in the US and on WeChat in China.

Omeiza Makoju, ACCA, Energy analyst

Investing in US stocks provides a good opportunity to internationally diversify one’s portfolio, benefit from the positive outlook on US tech stocks and protect liquid assets from the “staggered devaluation” of the Naira by the CBN.

The foreign stocks I will invest in are US Tech stocks – Microsoft, Apple, and Facebook. In spite of the economic punches these 3 tech companies have been enduring since March 2020 when the global scourge of the COVID-19 pandemic became palpable, analysts retain a positive outlook on their performance in the remainder of 2020.

Key indices and trend analysis of their share prices since March 2020 reveals continuous strengthening of shareholder confidence as their stocks have appreciated between 30% to 50% exceeding pre-COVID-19 prices. I must say that in addition to the strong financials of Microsoft, Apple, and Facebook, I have chosen to invest in these US tech companies based on personal experiences with their products and services which have proven to be best in class.

Michael Nwakalor, Economist

A company I particularly like over a 2-year horizon is Livongo (LVGO). This is a company that introduced advanced health signals, a platform that leverages machine learning and artificial intelligence to get folks with diabetes back on track when their blood sugar levels start to climb.

Livongo’s meter technology and subsequent diet coaching when it observes negative trends save its customers and insurance companies thousands of dollars a year on health costs. With its membership base doubling over the past year and the company expanding applied health signals to tackle other chronic conditions, it is primed for growth in the long term.

Livongo recently had revenue growth of over 100% in Q2’20 after reporting similar growth in the first quarter.
While the company may seem expensive on a forward sales to price basis, it doesn’t look so expensive considering its triple-digit growth. Despite having quadrupled since its IPO last year, the high growth company may still have room for significant upside in the long term.