Archives for October 2021

Developments during the week for ICTOP10 Main Market stocks saw Sygnus Credit Investment adding another 5 percent to its value this past week on top of the 5 percent rise in the previous week to close at $18.65 from $17.80, to be up 17 percent for October. Sterling Investments rose 9 percent from $2.76 to $3 and Berger Paints gained 3 percent during the week. Caribbean Producers lost 2 percent, Guardian Holding fell 6 percent from $550 to $515 and Proven

Sygnus Credit Investments is up 17% in October.

Investments lost 7 percent to round out the main movements in ICTOP10 for the week. There were no additions to the ICTOP10 this week, but volatility continued, with Junior Market stocks bouncing up and down. Elite Diagnostic gained 3 percent to $3.10, Caribbean Assurance Brokers rallied 2 percent, from $1.75 to $1.79, Lumber Depot rose 2 percent to $2.89, with persistent selling above keeping a lid on price movement. Access Financial lost 7 percent to close at $17.25 from $18.50, AMG Packaging fell 7 percent to close at $1.80 from $1.93 after the company released full year results. Dolphin Cove dived 20 percent from $10.25 to $8.20, Medical Disposables with bright prospects for the future fell 10 percent to $4.74 and Stationery and Office Supplies slipped 2 percent to $6.40 from $6.50.
As 2021 slowly crawls to a close, the focus should be switching to 2022 along with the current year’s values to determine the appropriate valuation of each stock and the hold or fold decision. Most of the top 2021 stocks will not make the top 10 in 2022. The IC 80/20 rule, with a long 40 year history, shows an average of only two of the top ten stocks in a year repeat in the following one, while 4 out of 10 of the worst performing stocks will end up as TOP 10 winners in the succeeding year. The top seven stocks so far, with gains of 52 to 231 percent and three others gaining more than 100 percent are; Future Energy, Jamaican Teas, Fosrich, ISP Finance, Lumber Depot, Express Catering and Honey Bun. In the Main market, Caribbean Producers is 136 percent to date and is expected to deliver much more gains into 2022, Salada Foods rose 107 percent, Radio Jamaica has an increase of 103 percent, but investors can expect much more from this one but a lot is expected after the release of the September quarter results, Caribbean Cement is scheduled to release third quarter results next weekend, with the stock price up 88 percent for the year to date and Grace up 55 percent.
Elsewhere, Supreme Ventures released nine months results with 22 percent increased sales to $19.3 billion for the nine months but virtually flat third quarter sales of $6.3 billion with nine months profit slipping marginally from $1.55 billion to $1.54 billion and the third quarter falling from $596 million down to $311 million. Earnings per share ended at 57.7 cents and 11.8 cents for the quarter.  AMG Packaging released full year results, with profits of $62.6 million, up from $56 million in 2020 with earnings per share of 12 cents. The quarterly profit was $20 after tax and, in 2020, $18.4 million after a tax credit. Construction of the new facility is complete, and machinery and equipment are ordered and is expected to be installed during the November quarter.
The top three Main Market stocks are, Caribbean Producers currently consolidating around $7, but closed the week at $6.60, followed by Guardian Holdings and Berger Paints with expected gains of 238 to 264 percent versus last weeks’ 235 to 256 percent.
The top three stocks in the Junior Market are Elite Diagnostic, followed by Access Financial and Medical Disposables. All three have the potential to gain between 238 and 287 percent, from 220 percent and 300 percent previously.
The average gains projected for the TOP 10 Junior Market stocks moved from 200 percent last week to 213 percent and Main Market stocks remain at 173 percent.
The Junior Market closed the week with an average PE 13.2 based on ICInsider.com’s 2021-22 earnings and is currently well below the target of 20 and the historical average of 17 for the period to March this year, based on 2020 earnings. The TOP 10 stocks trade at a PE of a mere 6.5, with a 52 percent discount to that market’s PE.
The overall Junior Market can gain 49 percent to March next year, based on an average PE of 20 and 29 percent based on an average PE of 17. Nine stocks representing 25 percent of all Junior Market stocks with positive earnings are trading at or above this level, up from five last week, indicating that many others will rise above the 17 mark in the weeks ahead.
The average PE for the JSE Main Market is 15.6, which is 22 percent less than the PE of 19 at the end of March and 28 percent below the target of 20 to March 2022. The Main Market TOP 10 average PE is 7.7, representing a 50 percent discount to the market and well below the potential of 20. A total of 10 stocks or 22 percent of the market trade at or above a PE of 19, with most over 20, for an average PE of 25.5, suggesting that the accepted multiple maybe around 25 times the current year’s earnings.
The TOP10 is a selection of stocks that are most likely to deliver the largest gains within fifteen months. ICTOP10 focuses on potential yearly winners, accordingly, the list may or may not include the best companies in the market. ICInsider.com ranks stocks based on projected earnings to highlight winners from the rest, allowing investors to focus on potential winning stocks and helping to remove emotional attachments to stocks that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to March 2022 and ranked in order of potential gains, based on the possible increase for each company, considering the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in weekly movements in and out of the lists. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.