Investing in undervalued stocks is a great way to make money in the stock market. Sometimes it requires patience, a trait that is a big virtue in picking stocks that will be great performers in the future. One such stock is Jamaica Broilers, a pioneer in the poultry industry with the processing of pre-dressed chickens.
For the just concluded 2024 fiscal year, Jamaica Broilers Group reported profits of $6 billion compared to $4.3 billion in 2023 but the latest fiscal year’s results were buoyed by $2.27 billion from gains from sale of assets of a USA subsidiary, International Poultry Breeders Hatcheries.
Excluding the one-time gain, profit would approximate $4.20 per share compared to $4.43 last year. The 2024 decline is worse than the initial appearance, with profit in 2023 being negatively affected by a $1 billion loss from discontinued operations, in Haiti, excluding that loss the company would have earned $5.40 per share in that year.
The 2025 fiscal year is off to a slow start, with revenues of $23.45 billion up marginally from $23.39 billion in the similar quarter in 2024. Profit before and after tax fell in the quarter with net profit coming in at $1.1 billion versus $1.24 in 2023. The disappointing revenue performance in the latest quarter, occurred in the Jamaican operations with revenues of $14.07 billion down from $14.32 billion in 2024, pushing segment profit down to $1.59 billion from $1.75 billion. The US segment saw a minor revenue increase to $9.39 billion from $9.07 billion with segment profit slipping marginally to $1.165 billion from $1.175 billion.
Jamaica Broilers chicken
Revenues in the final quarter of the 2024 fiscal year were flat with that of 2023, due to an extreme tightening in the local economy that negatively affected sales across a wide cross-section of the local economy. While revenues for the nine months to January grew by 2.7 percent to $70.35 billion from $68.5 billion in 2023, revenues for the April quarter declined from $22.85 billion in 2023 to $22.6 billion, with the January quarter rising just under 4 percent to $70.35 billion from $68.50 billion in 2023.
The most positive development during the last fiscal year was a sharp fall in direct material input cost of raw materials used in production that fell to $45.89 billion from $48.17 in 2023, the decline in the Jamaica operation was more muted falling to $32.24 billion from $33.69 billion. A 14 percent rise in staff costs to $20 billion from $17.68 billion more than wiped out the gains from reduced material costs. The Jamaican operation had a 12.6 percent increase in staff cost to $9.38 billion from $8.3 billion in 2023.
Advertising and promotion expenses jumped 71 percent to $950 million from $556 million in the 2023 fiscal year but grew over two percent to $737 million in the first quarter to July this year. Administrative expenses rose just over 4 percent to $12.94 billion from $12.4 billion in the 2023 fiscal year and they were flat for the July 2024 quarter with that of 2023 at $2.9 billion. Finance costs jumped 45 percent to $2.68 billion from $1.85 billion and rose just over 3 percent in the July 2024 first quarter to $653 million.
Gross Profit margin in the latest fiscal year was 25.6 percent the same as in 2023 and operating profit rose marginally to $23.79 billion from $23.4 billion in 2023. In the July 2024 quarter, gross profit slipped from $5.7 billion in 2023 to $5.5 billion in 2023.
Segment results show the Jamaican division enjoying a one percent increase in revenues to third parties of $59.5 billion from $58.8 billion, contributing segment results of $8.3 billion, up from $7.6 billion in 2023 and the USA segment saw a 55 percent rise in profit to $5.9 million with the gain on sale of assets contributing to the growth, from $3.8 billion with revenues rising 2.8 percent to $33.45 billion from $32.55 billion in 2023. Other Caribbean
Operations delivered a loss of $652 million from a profit of $1.89 billion in 2023. Importantly, the group’s directors report, “In our pursuit of regional expansion, we’ve now successfully entered the Trinidad and Tobago market. Although still in its early stages, we anticipate substantial sales growth in this territory. The addition of this new market has already contributed to a remarkable 8 percent increase in export sales.”
The operations generated a Gross cash flow of $8 billion but growth in working capital, reduced it to a cash deficit of $2.5 billion, after addition to fixed assets dividend payment of $821 million and net loan payments, a deficit of $2 billion was incurred and resulted in cash funds falling to $2.8 billion.
Current assets ended the period at $59 billion at the end of April, including trade and other receivables of $6.3 billion, and inventories, including livestock amounting to $50 billion. Current liabilities ended the period at $40 billion. Net current assets ended the period at $19 billion.
At the end of the 2024 fiscal year, shareholders’ equity amounts to $30.8 billion with long term borrowings at $14 billion and short term at $20 billion.
The Group has capital commitments of US$4.46 million, down slightly from US$5.8 million in 2023, but spent $$2.29 billion or nearly US$15 million in the latest fiscal year, up from J$1.77 billion in 2023.
IC Insider.com projects earnings of $5.50 per share for the fiscal year ending April 2025, with a PE of 5.7 times the current year’s earnings based on the price of $31.50, the stock traded at on the Jamaica Stock Exchange Main Market and less than half of the average for the Main Market of 14.1. Net asset value at the end of July is $31.87 with the stock selling in line with book value.
In the All JSE TOP10 tTech replaced Iron Rock Insurance following a sharp appreciation in the latter’s stock price. The All JSE TOP10 includes ten stocks that are listed on Jamaica Stock Exchange that have the highest potential gains, using projected 2024 earnings.
The Main Market ICTOP10 is projected to gain an average of 320 percent by May 2025, based on 2024 forecasted earnings and providing better values than the Junior Market with the potential to achieve 228 percent over the same period.
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.
For the July 2024 quarter, other comprehensive income pushed total profit to $6.4 billion for the latest quarter versus $5.5 billion in 2023 and to $9.15 billion for the nine months after accounting for negative other comprehensive income of $4.85 billion and $9.17 billion in 2023 after negative other comprehensive income of $3.4 billion.
In the Junior Market TOP10, Cargo Handlers rose 14 percent to $9.08, followed by Caribbean Cream with a gain of 13 percent to $3.45 and Elite Diagnostic gained 10 percent to close at $1.75 and sits at the top of the ICTOP10 list, with both stocks in the All JSE TOP10.
In the Main Market, Key Insurance rose 7 percent to end at $2.98. Guardian Holdings dropped 10 percent to $288 and heads both the IC Main Market TOP10 and the All JSE TOP10. JMMB Group declined by 7 percent to $20.73 and Berger Paints slipped 4 percent to $6.10, with limited buying interest currently.
In the Junior Market IC TOP10 are 7 stocks, 15 percent of the market, with PEs ranging from 15 to 22 and a PE of 17 for half of the market with the highest values.
In the Junior Market TOP10, Lumber Depot rose 8 percent to $2.95, followed by One Great Studio popping 7 percent to 79 cents, Stationery and Office Supplies gained 6 percent to $1.73, following spirited trading in the stock after they released half year results and AMG Packaging rose 5 percent to $2.75. The Caribbean Cream stock continued to be pressured by the delay in publishing quarterly results, promised for August 29 but not yet posted, has dropped 12 percent in closing at $3.05.
There were two changes to the Main Market and Junior Market TOP10 listings for the week, one in the Junior Market and the other in the Main Market. Entering the Junior Market TOP10 is Cargo Handlers with the price falling to $8, with Lumber Depot falling out. In the Main Market, Palace Amusement dropped out allowing VM Investments to return to the TOP10.
In the Junior Market IC TOP10 are 10 stocks, 21 percent of the market, with PEs ranging from 15 to 23 and a PE of 17 for half of the market with the highest values.
At the close of the week, the mercurial price mover that trades as Kremi (Caribbean Cream) with delayed quarterly results, climbed 13 percent in closing at $3.45. Investors could be missing out on bargain prices currently. The company’s November quarter revenues rose a solid 9.5 percent, followed by a further rise by 13 percent in the 2024 fourth quarter, compared to just 2.6 percent for the nine months to November last year, suggesting a big increase of revenues and profit for the current fiscal year. AMG Packaging fell 7 percent to $2.61.
The All JSE TOP10 includes ten stocks on the Jamaica Stock Exchange with the highest potential gains in the market currently, based on projected 2024 earnings. The chart now shows Pulse Investments and Elite Diagnostic entering the All JSE TOP10 list as Access Financial and Iron Rock Insurance dropped out.
In the Junior Market IC TOP10 are 7 stocks, or 15 percent of the market, with PEs ranging from 15 to 22.
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In the JSE Main Market ICTOP 10, VM Investments gained 20 percent to $3.34 and Jamaica Broilers gained just 4 percent to $35. Berger Paints fell 14 percent to $6.36 and Pulse Investments lost 4 percent to close at $1.53.
In the Junior Market IC TOP10 are 9 stocks, or 18 percent of the market, with PEs ranging from 15 to 22 and a PE of 16 for the upper half.
The All JSE ICTOP10 are the ten most likely stocks to profit from listings on the JSE and had one change, with Access Financial gaining 16 percent and fell out All JSE TOP10 and was replaced by Consolidated Bakeries with a drop of 27 percent since the last report.
In the Junior Market TOP10, Caribbean Assurance dropped 18 percent to $2.99 before the company released six months’ results showing a 38 jump in revenues for the second quarter with a loss for the quarter and for the half year and tTech dropped 19 percent to $2.31.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market, but this is not always so. 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.
There are two changes to the ICTOP10 this week, as Iron Rock Insurance came roaring back after it was side lined from the TOP10 following the recent suspension of trading in the shares. The company released blowout results for 2024 and the first quarter this year, resulting in investors pushing the price to $3.04, with more to come, after the stock ended in both the Junior Market TOP10 and the all JSE TOP10. 
In the Main Market, Berger Paints plunged 29 percent to $6, on limited volume and with offers mostly above $8.40, followed by Margaritaville with a 12 percent fall to $13.60. Pulse Investments jumped 17 percent to $1.74, while VMW Investments rose 4 percent to $2.70.
In the Junior Market IC TOP10 are 11 stocks, or 23 percent of the market, with PEs ranging from 15 to 22.
In Junior Market ICTOP10, Consolidated Barkeries rose 14 percent to close at $3.85, Caribbean Cream gained 13 percent to $3.75 and tTech rose 5 percent to $2.50 following a switch in ownership of the company. Access Financial fell 9 percent to $19.95 followed by One Great Studio, down 7 percent to 77 cents.
The Main Market ICTOP10 is projected to gain an average of 312 percent by May 2025, based on 2024 forecasted earnings and providing better values than the Junior Market with the potential to achieve 207 percent over the same period.
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.
