Berger surges to the top

Berger Paints surged to the top of the list of stocks on the Trinidad & Tobago Stock Exchange that should return the highest gains to investors, in the months ahead, with the potential to reach 500 percent.
Next in line is Trinidad Cement with 300 percent. Scotiabank has fallen to $58 from a high of $73.12 earlier this year. At the close of trading for the week, Scotiabank’s price seems set to decline further, with selling pressure still overwhelming buying interest, at the current price level. The decline so far has put the stock back in the list of top buys, with potential gain of 40 percent at the last traded price. The bank reported poor results in the first half of the fiscal year, but showed strong gains in the July quarter including good pick up in loans. This suggest that 2015 earnings should move up attractively, subject to continued growth in the loan portfolio. Importantly the PE has fallen in line with Republic Bank at around 16 times earnings and only slightly above the rest. Berger has surged based on the latest results, putting profit for the six months to September at $1.122 million, a big improvement over than the $240,000 earned in the 2013 period and almost ensuring that the full year’s earnings of $2.93 million to March this year, will be bettered by a good degree. Berger’s profit improvement is flowing from reduced cost rather than sales growth. Sales fell slightly to $29.8 million for the half year, compared to $30.1 million in the 2013 period. IC Insider is forecasting $1.10 per share, around $6 million after tax for the current year.
Rounding out the top list of the stocks that virtually select themselves are, Sagicor Financial, Point Lisas, Guardian Holdings, National Flour Mills, Massy Holdings, First Citizens Bank, Ansa Merchant Bank, Republic Bank and Scotiabank.
The 2014 financial year for a number of the companies have ended in September, with more results to be released soon. Investors’ minds will start to focus on 2015 when the results for some of the companies will show improvement over 2014, making the stocks cheaper now than they are likely to be a few months from now when the results for 2015 starts to flow.
Trinidad Cement released their nine months results to September which point to earnings from continuing operations being 13 cents for the quarter and annualised at 52 cents per share. The agreement to supply Venezuela with 240,000 tonnes of clinker will help boost the group’s profit, while the contract is being satisfied. While debt is a negative, the present cash flow if continued, will see them out of danger within 3-4 years.
Overall the TTSE market average PE is at 14.4 with 12 stocks above this levels and 10 stocks below.