IPO closure lifts ICTOP10

The Jamaica Stock Main Market recorded gains to close out the past week on a positive note, but the performance only resulted in moderate changes in prices of ICTOP10 Main Market stocks, the Junior Market Index was flat compared with the prior week but resulted in some sizable price changes with one stock dropping out of the TOP10 as the Initial Public offer of Regency Petroleum shares was oversubscribed and closed and liquidity started returning to the market.
Access Financial dropped out of the Junior Market TOP10 after rising 11 percent for the week in making way for Medical Disposables to return.
Unlike last week when seven Junior Market TOP10 stocks declined between 3 percent and 20 percent, with only one rising this week. Rising stocks dominated, with five gaining 3 percent or more while three declined. CAC2000 ordinary share fell 15 percent to $7.06, Iron Rock Insurance was down 5 percent to $2.18 and Dolphin Cove lost 3 percent to close at $13.13. In the Junior Market, Paramount Trading recovered some of last week’s loss by rising 13 percent to $1.71, Lasco Financial popped 11 percent to close at $3, while Elite Diagnostic rose 4 percent to $3.49.
The Main Market 10 had just two stocks rising for a second week and six declining between four and nine percent last week. This past week, four rose 2 percent and 3 percent.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.7, well below the market average of 13.4. At the same time, the Junior Market Top 10 PE sits at 5.9 versus the market at 12, an important indicator of the level of undervaluation of the ICTOP10 stocks. The Junior Market is projected to rise by 246 percent and the Main Market TOP10, an average now of 269 percent, to May 2023.
The Junior Market has 12 stocks representing a third of the market, with PEs from 15 to 35, averaging 20 compared with the above average of the market. The top half of the market has an average PE of 17. This data shows the extent of potential gains that the TOP 10 stocks possess. The situation in the Main Market is similar, with the 16 highest valued stocks priced at a PE of 15 to 73, with an average of 24.7 and 21.7 excluding the highest valued one and 19 for the top half excluding the highest valued stock.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Major shake up of ICTOP10

The Jamaica stock market got hit in the past week as a new Initial Public offer of Regency Petroleum shares open to the public on Thursday. The market decline is now a very pronounced feature of the market as investors seek funds to invest in the new issue and pressure prices of existing stocks and provides opportunities for savvy investors to pick up stocks at depressed prices for the eventual rally after the IPO closes.

NCB Financial Group is now back in the ICTOP10

The pricing of the IPO issue does not provide enough likely gains for it to make the ICTOP10, but it is included in the Stocks to Watch as the price is expected to jump and deliver a decent profit.
In the past two weeks, several company results were released to the public, with varying outturns, some of which led to adjustments to earnings per share for the current fiscal year. Sterling Investments and VM Investments earnings were adjusted downward and fell out of the TOP 10 and were replaced by NCB Financial Group and Key Insurance. Earnings for Berger Paints and JMMB Group were also revised downward, but they remain in the Main Market TOP10. Access Financial and Iron Rock Insurance return to the Junior Market TOP10 as General Accident and Medical Disposables dropped out.
Seven stocks in the Junior Market TOP10 declined between 3 percent and 20 percent, with only one rising. The Main Market list had two stocks gaining for a second week and six declining between four and nine percent.
Notable price changes during the week include Paramount Trading that dropped 20 percent to an attractive $1.52, Elite Diagnostic and Lasco Financial dipping 10 percent to close at $3.35 and $2.71, respectively, Lasco Distributors lost 10 percent to $3.10 and Caribbean Cream fell 4 percent to $3.86.
In the Main Market, Guardian Holdings rose 10 percent to $550. VVM Investments dropped 7 percent to $4.07 while JMMB Group and 138 Student Living fell 9 percent to $34 and $4.50, respectively, Jamaica Broilers and VM Investments fell 7 percent to $26.35 and $4.07, respectively and Radio Jamaica lost 5 percent in closing at $1.91.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.6, well below the market average of 13.4. At the same time, the Junior Market Top 10 PE sits at 5.8 versus the market at 12, important indicator of the level of undervaluation of the ICTOP10 stocks. The Junior Market is projected to rise by 247 percent and the Main Market TOP10, an average now of 275 percent, to May 2023.
The Junior Market has 13 stocks representing a third of the market, with PEs from 15 to 30, averaging 20 compared with the above average of the market. The top half of the market has an average PE of 17. This data shows the extent of potential gains that the TOP 10 stocks possess. The situation in the Main Market is similar, with the 16 highest valued stocks priced at a PE of 15 to 90, with an average of 27 and 22.6 excluding the highest valued one and 19.4 for the top half excluding the highest valued stock.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

PBS jumps ICTOP10 with 89% gain

Productive Business Solutions surged 45 percent to close at US$2 from US$1.38 at the close of the previous week and dropped out of the TOP10, having entered at the beginning of April at $1.06 and has now recorded a gain of 89 percent. Caribbean Assurance Brokers slipped out of the Junior Market TOP10 following a downgrade of earnings per share with the release of nine months’ results.
138 Student Living made it back in the Main Market TOP 10 following reporting strong full year results with the promise of more in 2023 as students return to on campus training and Medical Disposables returns to the Junior Market list.
The Junior Market had five top 10 stocks gaining between 4 percent and 14 percent, with two declining over five percent. The Main Market list had only two stocks gaining from 10 and 45 percent with five losses but with four ranging from 4 to 9 percent.
Notable price changes during the week include Lasco Distributors rising 14 percent to $3.10, General Accident and Lasco Financial popped 10 percent to close at $5.05 and $3, respectively, Elite Diagnostic was up 6 percent to $3.72 and Caribbean Cream rose 4 percent to $4. Caribbean Assurance Brokers lost 8 percent to close the week at $2.39, following the release of nine months results that rose 33 percent to 40 cents, with the crucial third quarter results being flat in contrast to solid growth in the first half of the year.
In the Main Market, Productive Business Solutions rose 45 percent during the week to $2, followed by Radio Jamaica, that jumped 10 percent to $2. VVM Investments dropped 9 percent to $4.39 while Caribbean Producers slipped 5 percent to $12.33, Berger Paints also dipped 5 percent and ended at$10.40 and Guardian Holdings fell 4 percent to $500.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.3, well below the market average of 13.4. At the same time, the Junior Market Top 10 PE sits at 6.2 versus the market at 12.4, an important indicator of the level of undervaluation of the ICTOP10stocks. The Junior Market is projected to rise by 224 percent and the Main Market TOP10 an average now of 298 percent, to May 2023, following an upgrading of Guardian Holdings earnings per share to $173.50 from $92 previously.
The Junior Market has 14 ; stocks representing a third of the market, with PEs from 16 to 38, averaging22 compared with the above average of the market. The top half of the market has an average PE of 18. This data shows the extent of potential gains that the TOP 10 stocks possess. The situation in the Main Market is similar, with the 15 highest valued stocks priced at a PE of 15 to 80, with an average of 28 and 24.3 excluding the highest valued one and 22.5 for the top half excluding the highest valued stock.
ICTOP10 focuses on likely yearly winners. Accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Surge in profit at Wisynco

Add your HTML code here...

The Jamaica stock exchange listed drinks company Wisynco chalked up record revenues for the September quarter, with a solid increase of 29.8 percent to $11.9 billion above the $9.2 billion reported in September 2021, that led to a substantial gain in profit.

Wisynco headquarters.

The healthy revenue performance delivered a 34.7 percent rise in profit of $1.7 billion before taxation, compared to $1.3 billion in 2021. After provision for taxes of $431 million in the quarter compared with $316 million in 2021, profit attributable to Stockholders climbed to $1.3 billion, up 34.1 percent from $967 million earned in the prior year. The strong performance resulted in earnings of 35 cents per share for the 2022 quarter versus 26 cents in 2021.
“We are encouraged by the increased demand for our products in all channels, including exports which were up 10 percent over the same quarter of the prior year. The supply chain challenges continued into this quarter however we are seeing improvements,” the Mahfood brothers stated in the report to shareholders.
Gross Profit for the quarter of $4.3 billion was 31.8 percent more than the $3.3 billion achieved in the same quarter of the previous year. The Gross Margin ended up at 36.2 percent, slightly higher than the 35.6 percent for the corresponding quarter in the prior year. The results include an exchange loss of $126 million and a $59 million loss for the last year’s comparative quarter.
Selling and Distribution expenses rose 29 percent to $2.1 billion from $1.65 billion in the 2021 quarter, while Administrative expenses climbed 20 percent to $455 million from $379 million in 2021. Finance cost jumped to $150 million from $86 million in 2021.
According to the Mahfood brothers, “inflationary increases and variable expenses, which increase with Revenues, are the primary reasons for the expenditure growth however these increases are at a slower rate when compared to the rate of growth in Revenues.”
“Our Balance Sheet remains strong with a current ratio of 2.8 (same as last year’s quarter). Inventories remain higher than the prior year, although slightly lower than at June 30, as we continue to maintain higher amounts of key materials due to supply chain challenges. “
“We expect some normalization of inventories going into Q2 and Q3 as we utilize the inventories on-hand and we are seeing less congestion at global ports and freight rates improving,” the report further stated.

Wata one of Wisynco best known brands

Cash Flow generated inflows of $1.9 billion, after working capital needs and payment of taxation and capital and investment activities plus paying $751 in dividends, there was a net outflow of $1.4 billion. Importantly, $349 million was expended on the purchase of property plant and equipment with longer term investment absorbing $1.4 billion.
Shareholders’ equity of $19 billion up from $17.8 billion at the end of June 2022. Long term borrowing is down to just $920 million. Current portion of loan to be repaid over the next twelve months at $920 million, bringing the total amount of borrowed funds to $1.84 billion. Current liabilities amount to $6 billion and current assets at $17.2 billion resulting in net current assets of $11 billion that includes cash and equivalent of $7.6 billion. The group also has investment securities amounting to $1.7 billion. ICInsider.com projects $2 for the full year giving it a PE of 9 at a stock price of $18 it traded on Tuesday on the Main Market of the Jamaica Stock Exchange with earnings of $2.85 per share for the fiscal year 2024, making it a solid buy for long term gains.

Profit climbs at Lasco Manufacturing

Profit rose 23 percent at Lasco Manufacturing for the three months to September to $469 million from $380 million in 2021 and 13 percent from $782 million in the six months to September 2021 to $883 million in 2022.
Gross profit margin fell in the first quarter to just 34 percent but rebounded to 37 percent in the second quarter to September this year, similar to what obtained in 2021 and brought the year to date margin to 36 percent compared to 37 percent the previous year, suggesting the company has now restored the margins to 2020 levels.
Revenues rose 22.6 percent in the quarter to $2.87 billion from $2.33 billion in 2021 and up 17.5 percent for the six months to $5.47 billion from $4.66 billion. Gross profit rose 18.4 percent to $1.07 billion in the quarter, from $870 million in 2021 and climbed 15.3 percent to $1.97 billion for the six months compared to $1.71 billion in 2021.
Operating expenses rose 18.5 percent to $378 million in the 2022 September quarter versus $319 million in the comparable quarter in 2021. They increased 10.75 percent to $690 million for the six months to September 2022 versus $623 million last year.
Finance cost fell to $7 million in the September quarter versus $13 million in the three months in 2021 and $15 million to the half year to September versus $29 million in the prior year, with taxation jumping to $210 million in the quarter versus $173 million in 2021 and to $361 million in the half year to September 2022 versus $327 million last year.

Some of Lasco’s products

Cash Flow generated inflows of $1.38 billion to September. Dividend absorbed $413 million and loan repayment $109 million while working capital took up $720 and $436 million went into short term investments and purchase of fixed assets, resulting in net outflows of $312 million.
Shareholders’ equity of $9.9 billion, up from $8.4 billion at the end of 2021. Long term borrowing is down to just $48 million, with the current portion due to be repaid over the next twelve months being $207 million, other current liabilities amount to $1.5 billion, leading to net existing assets of $5.8 billion after taking into account current assets of $7.5 billion that includes cash and equivalent of $2.9 billion.
Earnings per share was 11 cents for the quarter and 21 cents for the half year, with ICInsider.com projecting 60 cents for the entire year, giving it a PE of 6.5 at the stock price of $3.85 it closed at on Friday on the Junior Market of the Jamaica Stock Exchange and earnings of 80 cents per shares for the fiscal year 2024 that could see the stock hitting $15 by then.
According to executive chairman Lascelles Chin, the outlook is that they “remain cautiously optimistic for continued growth in the forthcoming quarters as we have seen an easing of supply chain bottlenecks and material cost inflation seems to have stabilized. With the ongoing geopolitical conflict in Europe, headwinds are, however, possible. Whatever may arise, we will remain focused and proactive in executing our business plan to deliver growth and margin progression.”

Lasco Financial heads Junior Market TOP10

Iron Rock Insurance rose 23 percent for the past week after closing at $2.72. It exited ICInsider.com TOP10 of Junior Market stocks while Lasco Financial climbed back into the top list to be the stock likely to gain the most into the first half of 2023, with 268 percent, at the same time, Key Insurance gained 8 percent to close the week at $3.76, enough to push it from the TOP10 to be replaced by Radio Jamaica that dropped to $1.81 on Friday.
Following Lasco Financial half year results, with profit up 26 percent in the September quarter, earnings for the full year were raised from 40 cents to 50 cents, with the company resuming growing the loan portfolio. Lasco Manufacturing released six months of results to September that rose 23 percent in the quarter, an improvement over the first quarter and retains earnings previously projected.
The past week ended with the Junior Market moving modestly higher, as it continues to consolidate ahead of a break that is poised to move it sharply higher, with third quarter results to start hitting the market in droves this week and next. The Main Market also closed marginally higher at the week’s end than the previous one.
The Junior Market rise during the week benefitted from three of the top 10 stocks gaining between 5 percent and 23 percent with only one decline of note. The Main Market’s highest loser fell 4 percent, while four stocks gained 4 to 8 percent.
Other notable price changes during the week include Dolphin Cove, with an increase of 8 percent to $14 and Paramount Trading, up 5 percent to $1.99, while Lasco Manufacturing declined 9 percent to close the week at $3.85 in the Junior Market and in the Main Market, Productive Business Solutions rose 6 percent to $1.38, Guardian Holdings jumped 5 percent to $519 following the release of impressive nine months results and VVM Investments popped 5 percent to $4.80 while Caribbean Producers slipped 4 percent to $13.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 6.2, well below the market average of 13.6. At the same time, the Junior Market Top 10 PE sits at 5.9 versus the market at 12.6, an important indicator of the level of undervaluation of the ICTOP10s tocks. The Junior Market is projected to rise by 243 percent and the Main Market TOP10 by an average of 256 percent by May 2023.
The Junior Market has 14 stocks representing a third of the market, with PEs from 16 to 38, averaging 22 compared with the average of the market. The top half of the market has an average PE of 18.5. This data shows the extent of potential gains that the TOP 10 stocks possess. The situation in the Main Market is similar, with the 15 highest valued stocks priced at a PE of 15 to 80, with an average of 25 and 22 excluding the highest valued one and 21 for the top half excluding the highest valued stock.
ICTOP10 focuses on likely yearly winners. Accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Q2 profit climbs 26% at Lasco Financial

Profit climbed a respectable 26 percent for the September 2022 quarter to $74 million from $59 million in 2021, for Lasco Financial Services, with the six months’ profits climbing 17 percent to $157 million over the $134 million garnered in 2021. 
The improvement in profit arose from a 12.5 percent rise in income to $623 million for its second quarter to September against income of $554 million in the 2021 second quarter. Importantly, the performance of the September quarter exceeds that for the June quarter, when revenues came in at $564 million with profits of $56 million, suggesting that growth of revenues and profitability could be accelerating quarter over quarter and not only year over year.
For the half year, revenues rose just 3.7 percent to $1.188 billion from $1.145 billion for the six months in 2021.
For the 2022 September, quarter expenses excluding finance costs rose 11 percent to $469 million from $424 million in 2021 as administrative and other expenses climbed 18 percent to $324 million from $275 million in the 2021 September quarter and selling and promotional expenses declined from $150 million in the September 2021 quarter to $145 million in 2022. For the six months, total expenses increased by just 5 percent, from $857 million to $900 million. Administrative expenses increased 7 percent to $592 million from $555 million in 2021, Management reported that the increase is “in line with the expansion of services and growth in staff.” Selling and Promotional expenses rose marginally to $307 million from $302 million for the same period.
Finance costs fell from $46 million to $28 million in the September 2022 quarter and from $93 million for the September 2021 half year to $55 million in 2022. Taxation more than doubled from $25 million to $52 million in the September quarter and increased from $61 million in the six months to September 2021 to $76 million in 2022.
Earnings per share came in at 5.8 cents for the September 2022 quarter and 12.3 cents for the half year. With the December quarter usually generating the largest income and profit, ICInsider.com projects earnings of 50 cents for the year ending March 2023 and 90 cents per share for 2024. The outcome could be even better if the loan portfolio that was nearly $2 billion in 2019 grows back fast enough from the $812 million net of loan losses it fell to in March this year. Based on the earnings per share, the company’s stock trades at a PE of just 5.4 compared to an average of 12.6 for the Junior Market and just three times 2023 earnings, based on the closing price of $2.72 on Friday making the stock a strong buy.

Lasco Financial profit dropped 39% in 2018 Q2.

The company moved to expand its loan portfolio. Management points to a reduction in cash resulting from an “increase in loan disbursements as we make a push to expand our portfolio and market share”, management states in the commentary to shareholders.
Shareholders equity stood at $2.1 billion at the end of September this year, up from $1.84 billion at the end of September 2021, while borrowed funds amount to $1.5 billion, down from $1.64 billion at the end of September last year. Loans and receivables rose to $1.5 billion from $1.4 billion in September last year and cash and cash at bank and short term deposit amount to $1.64 billion versus $1.7 billion in 2021.
During the six months, $278 million in cash was provided from operating activities compared to $376 million in 2021, after $523 million was used in investing and financing activities cash and bank balance fell $244 million and reduced cash and cash equivalent to $722 million from $897 million in 2021.

Promise for Junior Market TOP10

In a week when Junior Market made a modest move higher, as it looks well positioned to break sharply higher, with third quarter results hitting the market in droves beginning this week, the Main Market closed at its lowest level since the year of covid-19, at the start of September 2020, but may not be far from bottoming.

Junior Market with wedge formation that looks poised to break sharply higher.

NCB Financial dropped to a 52 weeks’ low of $80 during Friday’s trading and was the main factor in the market two year low.
This week, Medical Disposables earnings were downgraded to a respectable 75 cents, which is inadequate to keep it in the ICTOP10 but remains a strong buy for investors to enjoy growth. Lasco Manufacturing rejoins the Junior Market ICTOP10.
Even as the junior market rose during the week, three of the top 10 stocks declined between 5 percent and 11 percent with no increases of note. The Main Market’s highest losers fell 7 percent, with no significant gains in the market listing.
Price changes worth noting include iron rock insurance, with an 11 percent fall to $2.22, followed by  General Accident with a decline of 10 percent to $4.55, Paramount Trading lost 7 percent to $1.90. Caribbean Cream declined 6 percent to close the week at $3.86 in the Junior Market and in the Main Market, VVM Investments fell 7 percent to $4.60 while Productive Business Solutions slipped 6 percent to $1.30. JMMB Group was down 5 percent to $36.20.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 6.2, well below the market average of13.5, while the Junior Market Top10 PE sits at 5.6 versus the market at 12.9 , important indicators of the level of undervaluation of the ICTOP10stocks. The Junior Market is projected to rise by 243 percent and the Main Market TOP10 by an average of 256 percent to May 2023.
The Junior Market has 15 stocks representing a third of the market, with PEs from 15 to 39, averaging 22 compared with the above average of the market. The top half of the market has an average PE of 18.5. This data shows the extent of potential gains that the TOP 10 stocks possess. The situation in the Main Market is similar, with the 14 highest valued stocks priced at a PE of 16 to 76, with an average of 26 and 22 excluding the highest valued one and 21 for the top half excluding the highest valued stock.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

CPJ drops to 3rd on Main Market TOP10

In a week when Junior Market made a modest move higher, the Main Market closed lower, and resulted in no new entrants into the IC top 10 lists, in a week when three stocks gained 10 percent or more and one with a 6 percent increase, with no significant declines.
Price changes worth noting include, Medical Disposables with a 12 percent rise to $5.79, Paramount Trading up 10 percent to $2.04 and Caribbean Assurance Brokers rising 6 percent to close the week at $2.59 in the Junior Market and Caribbean Producers gaining 11 percent to close the week at $13.93, to move from number one spot last week to third this week and Key Insurance rising 4 percent to $3.64 in the Main Market. Caribbean Cream earnings per share were reduced to 70 cents for the year to February from 80 cents previously.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 6.2, well below the market average of 13.7. At the same time, the Junior MarketTop 10 PE sits at 5.8 versus the market at 12.5, essential indicators of the level of undervaluation of the ICTOP10 stocks. The Junior Market is projected to rise by 248 percent and the Main Market TOP10 by an average of 247 percent by May 2023.
The Junior Market has 14 stocks representing a third of the market, with PEs from 15 to 36, averaging 21 compared with the above average of the market. The top half of the market has an average PE of 18. This data shows the extent of potential gains that the TOP 10 stocks possess. The situation in the Main Market is similar, with the 15 highest valued stocks priced at a PE of 16 to 78, with an average of 26 and 22 excluding the highest valued one and 18 for the top half excluding the highest valued stock.
Currently, the Junior Market reflects a positive positioning and is poised to move higher in the weeks ahead. The recent negative clouds that hang over the main markets seem to be lifting, with the market index slowly bouncing off recent lows.
ICTOP10 focuses on likely yearly winners. Accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Profit jumps at CPJ but watch 2023

Two Fridays ago, investors snapped up 1,258,697 shares, 12 times the average Caribbean Producers shares traded since mid-September, but the price pulled back to $12.50 at the close of the first Friday’s trading in response to the company reporting record earnings of US$7.5 million after corporation tax of $1.744 million in delivering J$1.05 per share for the year to June, more than 50 percent over the US$5.24 million made in 2018, with no tax then payable, the previous best year.

Caribbean Producers traded 52 weeks’ high during the week following a near US$2 quarterly profit.

The company reported a loss of US$2.3 million in 2021, resulting in lower revenues as the hotel sector they sell to primarily operated at low levels after closure in 2020 due to Covid-19.
Sale revenues climbed 209 percent for the year, to $120 million from just $57 billion in 2021. The 2022 final quarter produced revenues that were 58 percent higher than in 2021, coming out at US$33.5 million and delivering a pretax profit of US$1.5 million, with the gross margin down to just 22 percent in the quarter. Inventory written down accounted for US$1.1 million in the June quarter, down from US$1.37 million in 2021, with the company posting revenues of US$21 million and profit of US$1.3 million.
The 2022 results were delivered, with tourism traffic at just 78 percent of 2019 for the 12 months to June this year, with the final quarter benefiting from tourist traffic just 3 percent less than in 2019.
Profit margins increased from a low of 24 percent in 2019 to 30 percent in 2022 and are up from 25 percent in 2021 and 27 percent in 2020, leading to gross profit rising to $34.8 million in 2022 from $14.74 million in 2021 and $20.7 in 2020.
Segment results show the Jamaican operation enjoying a 96 percent increase in revenues to third parties of $97.5 million, up from $46.9 million in 2021 and contributed segment results of $7.4 million, up from a loss of $2 million in the previous year, while profit for the St Lucian operations increased to $436,000 million from a loss of $522,000 in 2021, with revenues rising 103 percent to $23.45 million, from $11.56 million in the prior year.
Selling and administrative expenses rose 50 percent to $18.2 million for the year from $12.1 million in 2021, but depreciation remained nearly flat at $4.2 million from $4.19 million in 2021. Finance cost jumped 34 percent to $2.95 million from $2.2 million in 2021.
Gross cash flow brought in $13.5 million, but growth in receivables, inventories and addition to fixed assets offset by increased payables more than wiped out the inflows leaving a deficit of $3 million that was funded by net borrowings of $3.5 million.
At the end of June, shareholders’ equity stood at $23 million, Long term borrowings ended at $15.7 million and short term at $26.7 million. Current assets accounted for $62.6 million, including trade and other receivables of $8.4 million, inventories at $40 million, almost twice the level in 2021 and cash and bank balances of $4 million. Current liabilities amounted to $46.8 million. Net current assets ended the period at $16 million.
At the end of July this year, the company issued $13 million of Unsecured Fixed Rate US$ notes, with a tenor of five (5) years and during the continuance of an Event of Default bear interest at 10% per annum and at all other times 7% per annum. The monies received were used to repay existing related party loans at varying interest rates.
ICInsider.com forecasts J$2.75 per share for the fiscal year ending June 2023, with a PE of 5 times the current year’s earnings based on the price of $13.93 the stock traded at on the Jamaica Stock Exchange Main Market, with a price target of more than $40 in 2023.

Not mentioned in comments from the company is the outcome of discussions they were to have regarding an acquisition in the Easter Caribbean and the raising of fresh equity capital to help fund the acquisition and reduce the heavy debt load.