The prices of certain commodities often have a positive effect on listed companies in their sectors. Palmci does not seem to escape the rule and the question is how long it will last.

The share value of Palm Côte d'Ivoire (Palmci), a company listed on the UEMOA Regional Stock Exchange based in Abidjan, fell from 1250 FCFA towards the end of October 2020 to 2500 FCFA on January 18, 2021. This is an increase of 98.4%, according to calculations by the Ecofin Agency.

This performance was marked at the start by purchases of 185,200 shares between October 23 and 27, 2020. The largest acquisitions were made on October 27 (184,800 shares acquired).

For those who invested in Palmci that day, the potential capital gain if they kept these securities in their portfolios is currently 203.7 million FCFA. This gain is interesting for investors who position themselves on the short term.

According to people who follow this investment objective, the performance achieved by the Palmci share is beyond the forecasts made at the beginning of September 2020.

This company's stock is currently at its highest level since mid-June 2018. Two main factors seem to be behind this performance.

On the one hand, there is its first results of 2020. Supported by a 33% increase in palm oil prices worldwide, its turnover followed the same trend. In this context, its net profit jumped by 144%, reaching 6.8 billion FCFA.

The company did not release any other results for the 2020 financial year. But it can be strongly assumed that it performed strongly, given the correlation between the price of palm oil in global level and its financial performance. From this point of view, the price of this raw material jumped 76.3% between April 1 and the end of December 2020.

This prospect seems to have caught the attention of investors who are hoping for large sales volumes, and therefore a solid net margin. But some wonder if its stock price is now in line with its actual income prospects.

Since January 1, 2021, prices on future palm oil contracts have fallen by 9%, and yet the value of Palmci has continued to rise, and is up by 19.3%.

Also, over the 5 years preceding 2020, the company has only distributed dividends twice. At the end of 2019, the cumulative carryover on its net income was negative at 18.2 billion FCFA.

Palmci publishes its results with a certain lag, which does not allow investors to have several analytical levers to decide whether or not they should continue to maintain it. Remember that the company's free float represents 32.9% of its capital.