Okomu Oil’s stock surged by 9.99% on the trading day ending August 26, 2024, breaking an 11-day streak of stagnant price action. The stock, which opened at N345, closed the trading session at N379.
This significant price movement follows the company’s release of its second-quarter results for 2024, which revealed an impressive 84% year-over-year increase in revenue for the period ending June 30, 2024.
Revenue jumped from N40 billion in 2023 to N75 billion, while pre-tax profits also rose by 27%.
The strong financial performance influenced buying pressure on Okomu Oil’s stock, leading to a 36% spike in trading volume in June 2024.
The increased market activity continued through the third week of June and into July and early August, with trading volumes consistently exceeding 2 million shares.
Despite closing at a high of N353 on August 8, 2024, the stock experienced 11 inactive trading days, during which it remained stagnant at N345 per share.
However, the recent jump to N379 marks a significant turnaround, reflecting renewed investor confidence.
What to Know:
- The stock opened trading at N345 on the first Monday of the 4th week, August 26, 2024.
- Daily trading volume surged by 98% compared to the last trading day of the previous week, driven by strong buy-side pressure.
- The stock closed at N379, marking a 9.99% increase from the previous trading day’s price, with a market volume of 335,000 shares.
- N379 is the highest price the stock has ever reached since its listing on the Nigerian Exchange.
Dividend payment:
On April 27, 2024, the shareholders of the company approved a dividend payment of N14 per share, subject to tax withholding, for registered members. This resulted in a total dividend payout of N13.35 billion.
The dividend was distributed to registered members on May 23, 2024. Following this payment, bullish price action returned in May lifting the stock from a shallow dip of N232, closing the month at N255.
Robust growth in the company:
In the 2023 annual report released in March 2024, Okomu Oil’s Chairman, Mr. Gbenga Oyebode, attributed the company’s revenue and pre-tax profit growth to “an inflation-driven increase in the price of products that the company sells.”
- He noted that the prices of crude palm oil (CPO) rose by 22% year-over-year, while rubber prices increased by 28%.
- The company’s ability to pass rising production costs onto consumers has been a key factor in driving higher sales, particularly due to the market rise in rubber and, most notably, palm oil.
- Since April 2024, Okomu Oil’s stock has not experienced a retracement. However, some investors might be waiting for a slight pullback before taking a buy position on the stock.
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