Honey Bun doubles Q2 profit.
For the second quarter to March, revenues increased 15.5 percent over the correspondent quarter last year to $406 million from $352 million in 2018, with the growth bettering the 14.2 percent or $36 million revenues in the first quarter to December.
“Revenues from export sales have increased by 16 percent over the prior period, sales growth is attributable to our meeting customer demand having invested in increasing our production capacity over the period,” the director informed shareholders in their report accompanying the quarterly results. For the six months period, revenues increased by 15 percent over the correspondent of last year to $775 million, up from $675 million in 2018 while profits before tax increased by 57 percent to $112 million and after tax profit grew 75 percent to $109 million. The financial performance was driven by improvements in productivity, process efficiencies and other cost savings initiatives. Administrative, Marketing and finance cost rose 13 percent in the second quart and 17 percent for the half year compared to the similar periods in 2018.
One Honey Bun’s Products.
Total current assets less current liabilities amounted to $178 million, up from $115 million in 2018. The company’s cash as stood at $166 million with investments at $85 million while borrowed funds amount to just $26 million. Shareholders’ equity ended the period at $713 million.
The stock traded last on the Junior Market of the Jamaica Stock Exchange at $5.01 at a PE ratio of 11 times 2019 earnings, well below that of the majority of companies.
with possible gains of 210 percent. Of the three, Lasco Financial seems likely to break out after they release full year results later this week, but keep a keen eye on Lasco Manufacturing as well.
The main market, closed the week with the overall PE at 14.5 and the Junior Market at just 11.1. The PE ratio for Junior Market Top 10 stocks averages 7 and the main market PE 8.7. These levels, point to a big upside for TOP 10 stocks over the next 12 months and Junior Market stocks in particular.
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.
The bulk of investors who would be buying the vast quantity are more professional than not and are versed on the valuation levels of stocks. Accordingly, they are unlikely to be buying a stock that has doubtful expansion credentials at an inflated value. The most popular valuation tool, the PE ratio does not support a price much higher than $1.20, with EPS of 6 cents per share. A price of $1.20 equates to a relatively high PE ratio of 20. Only a few stocks are valued close to this multiple and many of them have prospects for profits to grow. Wigton has no immediate prospects for growth in earnings, pricing it at 20 times EPS would, therefore, be unwise. The market will speak but the heavy selling on Friday is more in line with the thinking that the top is not far off. Investors who buy shares above the accepted market norm will likely get crushed unless they have a long term investment horizon on their minds. PE ratios are there to give a sense of appropriate values. When investors try to break away from where the bulk of investments funds place the value of a stock at, they usually end up regretting the move.
The average volume and value for the month to date amounts 1,135,538 to units valued $12,389,326 and previously, 275,231 units valued $11,357,912. Trading for April resulted in an average of 157,923 shares at $3,718,919, for each security traded.
72,635, Kingston Wharves traded 2,328 shares but lost $2 to close at $68, shares changing hands. Mayberry Investments gained 45 cents and ended trading of 5,467 shares at $9, Mayberry Jamaican Equities rose 50 cents and ended trading of 94,800 shares at $11.50, NCB Financial Group jumped $5.75 trading 214,535 shares at $153. PanJam Investment dropped $4 with 4,199,150 shares changing hands, to close at $90, Salada Foods rose $2 to end at $32 in trading 2,000 stock units, Scotia Group climbed 50 cents to $50.50, with 39,401 shares trading and Seprod shed 70 cents trading 315,880 shares to close at $44.30.
Investors pushed the Junior Market index up 10.21 points to close at 3,138.66 on Friday with the same number of advancing and declining stocks but with very low volume passing through the exchnage.
The average volume and value for the month to date amounts to 72,405 units for an average of $278,724 and previously, 75,993 units for an average of $292,574. In contrast, April closed with an average of 87,963 units valued $317,267 for each security traded.
iCreate lost 10 cents to close at 80 cents, with 102,553 shares traded, Indies Pharma ended trading 5,000 stock units with a gain of 2 cents to close at $3.08. Jamaican Teas closed 1 cent down at $4.69, after trading 200 shares, Jetcon Corporation ended at $1.95, with 12,200 shares changing hands, Key Insurance concluded trading of a mere 100 stock units with a loss of 55 cents at $3.35, Lasco Distributors added 5 cents and ended trading of 3,195 shares at $3.80. Lasco Financial rose 1 cent in trading 11,354 shares at $4.69, Lasco Manufacturing closed trading of 8,943 stock units at $3.43, Main Event lost 30 cents to close at $5.10, with an exchange of just 369 units and Stationery and Office settled 11 cents lower at $9.01, with an exchange of 24,912 stock units.
Guardian Holdings fell 5 cents and settled at $18.45, after exchanging 7,898 shares and JMMB Group closed with a loss of 8 cents at $2.10, with 57,783 stock units changing hands.
Massy Holdings concluded trading of 1,889 stock units with a loss of 20 cents to end at $54.75. NCB Financial Group traded 13,925 stock units with a loss of 9 cents to end at $8.36, Prestige Holdings fell 25 cents to close at $9.50, after exchanging 5,000 shares and Sagicor Financial closed with a loss of 3 cents at $9.22, with 140,257 units crossing the exchange.
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