The Initiates Plc is a Nigerian waste-management and industrial-cleaning company whose business spans hazardous-waste treatment, environmental remediation and specialised cleaning services, including work connected with the oil and gas industry. Incorporated in 1995 and listed on the NGX in October 2016, the company operates in a sector where environmental compliance, industrial activity and demand for specialised waste treatment can create opportunities for long-term business growth
Current price: N24.70
Rating: Buy
Price projections: N35, N40, and N44
Technical Analysis
In this report, we shall use the following tools and analysis methods:
Elliott’s wave theory to understand the overall market sentiment
Fibonacci tools to determine support and resistance levels
The Relative Strength Index and volume to evaluate the market’s strength
The Money Flow Index to determine the market liquidity
Moving average and MACD to understand the nature of the trend
Top-down analysis to know the best investment position
Elliott wave analysis
Weekly chart: Market overview
The Initiates Plc retraced to the 0.5% Fibonacci level and commenced its recovery phase. This performance offers investors an opportunity to buy into value. In line with this sentiment, the bearish volume remained low, suggested reduced selling pressure. MACD also sustained its divergence signal, preparing for a trend reversal. Amid this recovery performance, the stock liquidity and momentum gradually improved on the weekly chart.
Daily chart: Investment opportunity
On the daily chart, investors should watch for support zones between N23 and N19. In line with TIP’s recovery phase, its volume, liquidity, and relative strength improved. Also, MACD sustained its divergence signal. Investors should prepare for a trend reversal with prices projected at N35, N40, and N44
SWOT Analysis
The Initiates Plc presents a growth-oriented investment case supported by rapid revenue expansion, strong operating-profit growth, specialised environmental services and a better-capitalised balance sheet.
Its ability to convert industrial demand into earnings is a clear strength, while lower EPS, rising receivables, substantial investment outflows and inconsistent comparative profit figures require careful monitoring.
The investment case would strengthen if new capital produces sustainable per-share earnings growth and stronger operating cash flow. Until then, TIP’s growth prospects are encouraging, but the durability of returns remains the central issue for investors.
