Report reaching IC Insider.com is that the long awaited prospectus for Wigton Windfarm is due this week. The stock is set to come to the market at 50 cents each.
According to the government’s public bodies accounting records, “the divestment will be by way of listing PCJ’s 100 percent shareholding in WWFL on the Jamaica Stock Exchange.” The company is expected to report profit of $587 million to the end of March this year, down from $826 million earned in 2018. The 2018 earnings were helped by other income of $637 million versus just $52 million in 2018.
The company generated sales revenue of $2.5 billion in 2019 and $2.36 billion in 2018. Depreciation charge is high at nearly $700 million, this will result in a healthy cash flow per annum, allowing to either pay down debt or fund expansion from internally generated resourses and provide a basis of growing profits going forward.
The annual growth in profit before finance cost is minimal, growing just over 11 percent in 2015 and 2016 and a much slower 7 percent in 2017 and 2018, with a 6 percent decline in 2019.
The company is heavily indebted with $7 billion of borrowed funds, $1.4 billion in cash funds on hand and equity of $2.4 billion. Current assets exclusive of cash and payables are minimal. Borrowed funds were mostly in US dollars and resulted in annual swings in net profit, as the exchange rate of the Jamaican dollar moved up and down against the United States dollar. Loans that were previously denominated in US dollars, were swapped for Jamaican dollar funds, in preparation for the initial public offer.
The company’s generating capacity is 63 mega-watts with the output contracted to Jamiaca Public Seervice Company. Assuming a PE ratio of 10, the company would be valued at just under $6 billion.
Archives for April 2019
Wigton Windfarm IPO out very soon
Major changes in IC TOP 10 stocks
The major change in IC Insider.com’s TOP 10 this pass week, is a sharp change in the stocks showing highest potential gains.
The three leading Junior Market stocks Last week, were Iron Rock with potential gains of 300 percent, Caribbean Producers 281 percent up from last week, as the stock slipped to $4.20 and Lasco Financial with potential gains of 211 percent. At the end of last week, the highest gains forecasted is down to 235 percent, with Caribbean Producers holding the top Junior Market spot.
Main Market stocks have gone in the opposite direction with a fall in the price of Sterling Investments to $3.50, the stock now boost potential to gains 186 percent, followed by Victoria Mutual investments with 156 percent likely gain and Radio Jamaica at 152 percent, being third.
The only change to the TOP 10 list is the exit of Lasco Manufacturing that rose to $3.60 on Friday, to be replaced by Caribbean Cream, that closed the week at $5.55.
The main market, closed the week with the overall PE at 13.6 and the Junior Market at just 10.4. 
The PE ratio for Junior Market Top 10 stocks average 6.9 and the main market PE is now 8.4. These levels, point to the huge upside for the TOP 10 stocks over the next 12 months.
The TOP 10 stocks now trade at an average discount of 34 percent to the average for the Junior Market Top stocks and main market stocks trade at a discount of 38 percent to the overall market.
TOP 10 stocks are likely to deliver the best returns within a 12 months period. Projected earnings, for each company’s current fiscal 
year, are used in determining, the selected stocks. The PE for and projected earnings for each stock are computed to show potential gains for the year, which are ranked in descending order. Potential values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Earnings per share are revised on an ongoing basis as new information is received that can result in changes in and out of the list.
This report is compiled by persons who may have interest in the securities commented on.
Watch Junior Market for break higher
Junior Market poised to breakout.
Jamaican stocks are in for an interesting period with Junior Market stocks down nearly 5 percent for the year to date, lagging their main market stocks counterparts that are up 2.2 percent for 2019, but technical indicators now point to a big rally for the Junior Market.
The Junior Market is currently, supported by two major technical indicators, indicating a rising market ahead. One is a triple bottom that it is bouncing off and the other a wedge formation, both indicate a big breakout. The last time the market had a triple bottom was between March and July last year and the market gained more than 500 points.
The Jamaica Stock Exchange main market may be consolidating, but it seems to be making another effort to challenge the record high of 433,307.22 reached by the All Jamaica Composite Index in November last year. With the market closing on Friday at 426,180.60 points, it will require some meaningful price gains to close the more than 7,000 points gap.
Carib Cement traded at $58 on Friday.
For the current week, which stock could contribute to closing of the gap? Buying interest remains good for Carib Cement that moved up by $2 by the close of the week to $58. There is some selling at the last traded price but demand should take this out soon. Radio Jamaica is in demand again with a big increase in the December quarter’s profit that spell positives for the 2020 fiscal year’s results.
Wisynco came in for some selling pressure last week by the close on Friday, the stock ended at $11.95. Going forward the stock is a strong buy with increasing business and improving efficiency in operations and with credible reports that they are in talks with other local producers to distribute some popular local brands. Supreme Ventures continues to make new highs and is worth watching. The price is high more up even higher during the week but supply seems inadequate to meet demand, but an investment in the stock now may only warrant those looking for long-term returns.
NCB Financial traded at $145.05 on the JSE on Friday.
More buying came in for NCB Financial with it closing the week marginally higher at $145.05. The stock may still take some time to break higher but with second quarter results due by end of April increase demand could well develop ahead of the results.
Junior Market stocks to watch this week include, the overhang of Cargo Handlers stock was taken out last week at $11.06 and seem set to pave the way for a bounce in the price, but the stock is a bit overvalued relative to the overall market. Caribbean Cream that closed at $5.55 but traded up to $6.60 in the previous week. Full year results are due towards the end of April and that could help the stock. Caribbean Producers came into buying last week, with a move higher going forward, supported by technical indicator. Sellers of General Accident shares continues to be low, but buyers are trying to get stocks no higher than $4.50 currently at a PE of 15 times 2018 earnings and well below likely 2019 earnings. Investors in the stock at the start of 2018 got a dividend that exceeded 5 percent. If the same were to happen in 2019, the stock would end up at $6 by the end of this year. Investors continue to demand Elite Diagnostic stock at $3.20 or lower with sellers mostly wanting close to $3.50. Trading higher may not occur until closer to the release of nine months results due by mid-May. Honey Bun is showing all the signs of moving higher and traded
Honey Bun traded higher last week.
at $4.24 this past week, up from $3.83 at the end of the previous week. The bid for the stock is now at $4.15. Fontana closed the past week with a slight uptick to end at $4.05, buying continues to be good. With strong potential for growth to flow from expansion of stores now on the way, the stock is to be watched for the inevitable breakout. Express Catering has been enjoying decent buying interest. It is bound to be a big winner from the double digit upsurge in Tourist arrivals so far in 2019. Lasco Manufacturing was in the news with expansion of the storage facilities to accommodate increased production, the stock gained last week and could record further gains this coming week, regardless it one worth watch for longer term gains.
