Fesco, JMMB & Sygnus in IC TOP10 stocks

IC TOP10 stocks are now based on earnings for 2021/22 fiscal years. Of the January listing, Stationery and Office Supplies have moved out of the TOP 10 Junior Market list while Main Market QWI Investment and Carreras fell from the Main market list with increased prices.
Coming into the TOP10 are Fesco, the latest IPO that is expected to come to market shortly, with the prospectus having been released but temporarily withdrawn to correct some errors. JMMB Group and Sygnus Credit Investments are now in the TOP10 Main market listing.
 Since the start of the year, the Junior Market is up 10.5 percent, with 11 companies’ stock rising between 20 and 63 percent, including four with gains from 49 percent up. The Main Market, on the other hand, is marginally down for the year by less than one percent, with five stocks recording gains between 21 percent and 47 percent and Ciboney rising 500 percent for the year to date.
The Junior Market and the Main Market moves are supported by technical indicators, pointing to robust gains ahead and back up by some companies reporting positive profit results.
This week’s focus: Grace Kennedy had outstanding results for 2020 with much more to come in 2021; expect the price to move sharply over the next few weeks. Caribbean Cement reported a 70 percent rise in profit for 2020 and is projected to earn $6.70 for 2021, the stock is an ideal candidate to move higher in the weeks ahead.
The top three stocks in the Junior Market can gain between 329 to 339 percent are Main Event followed by Elite Diagnostic and Jetcon. With expected gains of 202 to 459 percent, the top three Main Market stocks are Radio Jamaica, followed by Berger Paints and VM Investments.  
The local stock market’s targeted average PE ratio is 20 based on profits of companies reporting full year’s results, up to the second quarter of 2021. The Junior and Main markets are currently trading well below the market average, a clear indication of strong gains ahead. The JSE Main Market ended the week, with an overall PE of 14.7 and the Junior Market 9.8 based on ICInsider.com’s projected 2021-22 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 5.2 at just 53 percent of the market average. The Main Market TOP 10 stocks trade at a PE of 7.1 or 48 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 289 percent and 204 percent for the JSE Main Market, based on 2021-22 earnings. IC TOP10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. 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.

Record Carib Cement profit up 70%

Caribbean Cement reported record profit for the year ending December 2020 from sales that rose 13 percent to $20 billion and up 17.8 percent in the final quarter to $5 billion from $4.3 billion in 2019.
For the year, profit after tax surged 70 percent to $3.2 billion after tax provision of $1.2 billion. The tax charge includes deferred tax amounting to $414 million, down from $664 million in 2019. The results would have been far better but for a billion loss in foreign exchange movement, but interest cost fell from $939 million to $812 million, partially cushioning some exchange losses. Interest cost will fall further in 2021 as the debt load recedes with the strong cash flows allowing for the rapid repayment of the $4.4 billion of long term loans.
Gross profit improved rapidly, surging faster than the increase in revenues with a 26.45 percent increase from $7.2 billion to $9.1 billion. The company also benefited from reducing administrative and other expenses that fell from 2.5 billion to $2.35 billion. The company has contracts that hedge diesel fuel to protect it from major increases in one of the largest cost in its operations.
Earnings per share came in at $3.76 for the year, just ahead of ICInsider.com’s forecast of $3.76. ICInsider.com projects earnings of $5.7 billion with EPS of $6.70 in 2021.
Cement generated positive cash flow of $6.5 billion, repaid $4.7 billion in loans and paid $1.5 billion to redeem preference shares due to the Trinidad Cement, its immediate majority shareholder. The amount owing for the TCL preference shares is now down to $2.3 billion with loans outstanding at 4.4 billion, of which $3.1 billion is in Jamaican dollars owing to National Commercial Bank and $1.34 billion due to Cemex Espana in US dollars. The reduction in overseas debt has significantly reduced the foreign exchange exposure, with 2021 set to benefit from a sharp reduction in exchange losses.
At the end of the year, shareholders’ equity moved to $11.5 billion from $8.3 billion at the end of 2019. The stock is one of the original IC TOP 15 stocks for 2021 in the main market of the Jamaica Stock Exchange and remains in the list but now at 13th position with a target price of $135 in the next twelve months. The company is set to benefit from an improving economy, with low interest rates encouraging real estate development and ownership as well as expansion and rehabilitation of the country’s infrastructure that will consume an increasing amount of cement.
The stock closed at $65 on Friday with eth PE ratio at 17 times 2020 earnings and just 10 times 2021 projected earnings. The company has a strong balance sheet that is getting stronger each year and is moving into a phase where the payment of a dividend cannot be far away. Based on the above, Caribbean Cement enjoys ICInsider.com coveted BUY RATED investment approval.

2020 a great year for Grace Kennedy

The year just past may have been a terrible one for many, for at Grace Kennedy, they have much to be thankful for and management wish must be for another repeat performance like 2020.
Grace reports record profit of $6.2 billion attributable to shareholders for 2020, jumping 39 percent from $4.49 billion in 2019 after taxation more than doubled to hit $2.85 billion for an increase of 178 percent.
Profit before tax rose a strong 58 percent compared to 2019 to end at $9.7 billion. Importantly profit before other income jumped a stunning 82 percent to $6.8 billion while other income rose 20 percent to $3 billion. In what was a spectacular year for the 100 years old company, revenues grew 12 percent to $115 billion, surpassing the $99 billion generated in 2019. Direct and operating expenses rose 9 percent to $109 billion. Other comprehensive income brought total profits to $9.2 billion versus $9.26 billion in 2019.
The groups’ segments had a mixed performance, with Food trading profit almost doubling from 11 percent rise in sales while Insurance and Money transfer contributed 21 percent and 26 percent in profit but banking and Investments fell.
GK’s Food Trading segment saw improved revenue and profitability primarily due to the outstanding performance of its international food businesses. GraceKennedy Foods (USA) LLC showed triple digit increase in gross profit and marked growth in revenue, with the Grace and La Fe brands recording growth and improved margins; and GK’s Jamaican food distribution business recorded strong growth in both revenue and pre-tax profit, coupled with improved operating margins,” a release from the company stated.
The group earned 6.26 per share for the year versus $4.51 in 2019 and the stock price closed on Friday with a last traded price of $84.50 for a PE ratio of 13, well below the market average of 20. ICInsider.com projects 2021 earnings of $11 per share and see the stock heading close to $200 for the year and receives the coveted IC BUY RATED stamp of approval.
Total shareholders’ equity stood at $29 billion at the end of December, up from $27 billion in 2019. the group paid $1.59 billion in dividend during the year, up slightly from $1.54 billion in 2019.

Why the Top 15 Junior Market stock picks?

Add your HTML code here...

Junior Market stocks were affected by the dislocation caused by the COVID-19 virus more than their Main Market counter path, with their prices suffering more as well, but since March last year, the Junior market delivered greater returns than the majors. For 2021 to date, Junior Market stocks are up almost 10 percent while the main market is down modestly.

ICTOP10 Junior Market stocks now.

The future for some stocks in 2021 is clear, but for others, it is a bit hazy as they await the resumption of normal business operations. This publication sets out the rationale for the TOP15 selection in the Junior Market.
Since we published the TOP 15 lists at the beginning of the year, the Junior Market is up almost 10 percent with outstanding performances from some of the selections, with most moving out of the TOP 15 lists except Grace Kennedy and Caribbean Cream. Jamaican Teas is up 69 percent, Mailpac 31 percent, Caribbean Cream 11 percent, Lumber Depot up 60 percent, QWI Investments up 38 percent, and Grace Kennedy up 19 percent.
Assumptions were made pertaining to recovery and the extent for some stocks in the TOP15 list. Some investors may start to react to recovery potential for some and drive prices up before full recovery takes place. Stocks falling into this category are Caribbean Producers, Elite Diagnostics, Express Catering, Jetcon Corporation, Main Event, Stationery and Office Supplies.
The forecast is for price movements to get to their targets by March 2022. Earnings per share for some stocks are based on 2021/22 EPS for companies with year ending up to July 2021.
Lasco Financial –EPS 50 cents Current PE 5.4
Lasco Financial made large provisions for loan losses in the 2020 fiscal year amounting to $651 million and plunged it into a $57 million loss for the year. They provided an additional $193 million in the June quarter that pushed the quarterly results into a $106 million loss.
Provision for loan losses was down to $152 million at the half-year and fell further to just $9 million for the nine months to December, thus reversing the provisions up to September.
The company recorded profit after tax for the September 2020 quarter of $136 million, with Profit after tax for the six months to September amounting to $30 million.
The December 2020 revenues were down from September by $88 million to $527 million and below the 2019 quarter by $73 million. The main reason for the fall in revenues in December versus 2019 is due to a $70 million fall in interest income from loans. Loan interest income grew from$143 million in the September quarter to $158 million in the December quarter. Profit to December is up to $154 million from $77 million in 2019. Full-year results could come in at $300 million
In their September quarterly, the company indicated that “there will now be a shift towards lending again, however, as opportunities for lending are now beginning to manifest as businesses are adjusting to the new normal, with some embracing new opportunities.” The shift to increase lending will add to revenues and profit going forward, with IC Insider.com projecting 20 cents per share to March and 50 cents for the fiscal year 2022. The company traded at $2.76 at the end of December and last traded at $2.70.
Shareholders equity stood at $1.69 billion and borrowed debt of $1.7 billion at the end of December 2020.
Caribbean Cream – EPS 95 cents Current PE 5.
“A breath of fresh air” is how the recently opened Ocho Rios Caribbean Cream depot was described by a customer, according to the principals of the company in a report to shareholders accompanying the third-quarter results. This new location is expected to contribute positively to the growth of the product and results going forward.
For the November quarter, profit after tax grew 36 percent to $11 million and 96 percent to $85 million for the year to date. Revenue improved by 11 percent for the quarter to $441 million and eight percent for the nine-month period. Administrative and marketing expenses grew by 15 percent for the quarter and four percent for the year, totaling $127 million and $343 million, respectively.
Earnings per share doubled from 11 cents to 22 cents for the nine months and moved from two cents to three cents for the November quarter. The final quarter is the best for revenue generation and profit. Accordingly, ICInsider.com forecast is for full-year earnings of 50 cents for the year to February 2021 and 95 cents for the following year.  Shareholders’ equity grew by 12 percent over November 2019 to $818 million and the company has loans payable of $226 million. The company traded at $4.20 at the end of December and at $4.65 on Friday.
Caribbean Producers – EPS 65 cents Current PE 4.
This company’s profit was badly affected by dislocation in the tourism sector and full recovery will depend on the industry recovering substantially as a large portion of its revenues is dependent on the fortunes of the sector. CPJ started their new fiscal year with an improvement over the final quarter ended in June 2020 but notably off the mark compared with the corresponding quarter for 2019.
Revenues dropped by 65 percent from September 2019 to US$9.3 million, with gross profit falling 64 percent to US$2.4 million from 2019 out turn. The improvement over the June quarter coincides with the reopening of hotels and it should pick up further with Jamaica’s tourist arrivals hitting the 90,000 mark in December, from an average of less than 50,000 in the September quarter. Revenues in the December quarter climbed further to $15 million
Selling and administrative expenses declined slower than gross profit, falling by 51 percent, while depreciation charges jumped from $767 million to $1.07 million. CPJ moved from a loss of US$258 thousand in 2019 to a loss of US$1.85 million in the September quarter and $850,000 in the second quarter.
Shareholder’s equity stood at US$15.3 million with loans payable of $30.4 million and is highly over-leveraged at the end of 2020. The overleveraging at this time is a big negative just in case things take a longer time to return to some level of normality. Regardless, this is an area of operations that needs urgent attention.
The stock is likely to be a late bloomer, with earnings per share projected at 65 cents for the 2022 fiscal year ending June, assuming near full recovery in the hotel sector. The stock traded $2.80 at the end of December and traded at $2.67 on Friday. The potential for recovery exists, but the heavy debt loan makes it a riskier investment.

Main Event revenues recovering.

Main Event – EPS 67 cents Current PE 4.6
The arrival of COVID-19 virtually crippled the entertainment industry as nighttime curfews and social distancing halted many entertainment activities, a big earnings area for the company.
For the quarter ending July 2020, revenues were slashed 87 percent to $59 million and for the nine months to July 2020, dropped 31 percent from $1.37 billion to $945 million. Expenses were down by 98 percent for the quarter to $19 million and 31 percent for the year to $521 million.
MEEG recorded a net loss of $46 million for the July quarter and a net profit of $8.7 million for the year to date.
The depreciation charge accounted for $31 million of the quarter’s loss and $95 million for the nine months, resulting in positive profit before the depreciation charge and a small quarterly cash loss in the July quarter.
For the full year, the company reported a loss of $18 million with a depreciation of $148 million for a strong positive profit before depreciation. In the final quarter, revenues climbed over July quarter by 69 percent to $101 million and recorded a much lower loss of $27 million than in the third quarter with a depreciation charge of $53 million. It is unclear when the operation will return to good health. The early signs of improved revenues and positive cash flows augur well and placed them in a good position to weather the current economic storm with positive cash flow.
Cash funds amount to $132 million and loans of $238 million. Shareholders equity stood at $534 million at October 2020.
The company traded at $3.20 at the end of December and traded at $3.04 on Friday.
Elite Diagnostic – EPS 60 cents Current PE 4.6
The company came to market in 2018, with the previous year’s pretax profit at $60 million from just one location. Since then they have tripled locations with revenues rising 67 percent from $263 million in 2018 fiscal year to $439 million last year, but profit fell sharply with startup cost out weighting revenue increase.

ICInsider.com TOP10 Main market stocks.

A number of negative developments were at play driving up cost without the necessary increase in revenues. Expansion by its very nature incurs cost ahead of revenue generation. The company encountered problems with equipment, resulting in unscheduled repairs and cost and loss of revenues and finally, the advent of Covid-19 reduced opening hours and revenues.
The first quarter numbers to September last year were heavily impacted by reduced operating hours resulting in curtailed operations. The Directors note that a CT machine was not functional for an extended period, adversely affecting procedures they were able to undertake. The compounded fallout was net loss of $10.3 million for the September quarter down 162 percent from a net profit $16.7 million recorded for the September 2019 quarter and is a slight improvement over the June quarter’s loss of $12.5 million.
For the year to June 2020, net profit came in at just $8.6 million, an 83 percent drop from the previous year’s profit of $51 million as well as a decline from a profit of $23 million up to December 2019 with the March 2020 quarter showing strong promise with revenues of $236 million and profit of $21 million.
Revenue slipped by 7 percent for the September quarter to $110 million compared to 2019 but importantly, was up 20 percent over the June 2020 quarter. Operating expenses increased by six percent year-over-year to $42 million. The Directors state that the company has seen month-over-month revenue growth at the recently opened St. Ann location and expect to positively impact revenues for 2021.
The history of the company suggests, investors need to be patient for things to return to normal and for the St Ann branch to start generating adequate revenues and then profit.
Shareholder’s equity stood at $449 million at the end of September 2020, down from $460 million at the end of June 2020 and borrowed funds stood at $219 million. At the close of 2020, Elite Diagnostic traded at $3 at the end of December and traded at $2.76 on Friday. Earnings of 60 cents per share projected for the 2021/22 fiscal year.
Jetcon Corporation – EPS 15 cents Current PE 5
Reeling from the impact of COVID-19, profit at Jetcon dropped significantly year-over-year, for the quarter and the nine month period ending September 2020, which is expected to lead to vastly reduced 2020 full year results compared to 2019. A profit of $2 million was reported for the September quarter, down 91 percent from 2019 and $5.6 million for the year to date, a decline of 88 percent. The result was an improvement over the June’s quarter loss of $6.7 million. Sales fell 45 percent for the quarter to $153 million and by 38 percent to $467 million for the year but reflected a 78 percent improvement on the June quarter’s figures of $86 million.
Administrative and other expenses was flat at $23 million for the September quarter versus the similar period in 2019 and fell to and $71 million year to date versus $80 million in 2019.
The industry goes through years of boom and bust and could be returning to a period ahead of growth in revenues. The industry has gone through three years of declining sales, an unusual development that bodes well going into 2021 as it could mean that the downward cycle is at an end. Importantly, due to the poor sales in the second quarter last year, resulting in a loss, the company should enjoy better June quarter results all things being equal if the country continues on its current path of recovery.
Net current assets stood at $444 million at September 2020. Shareholders equity stands at $552 million and it has very limited debt that provides a good base for continued operations going forward.
The company traded at 79 cents at the end of December and traded at 77 cents on Friday with earnings per share that could rise in the region of 15 cents for 2021 assuming some major about-turn in demand for cars.
Medical Disposables – EPS 80 cents Current PE 5.6
Medical Disposables enjoyed a 12 percent increase in revenue during the quarter ending September 2020 to $630 million. For the six months, revenues hit $1.14 billion, only a two percent increase but Direct Expenses jumped 11 percent for the quarter to $480 million and $877 million for the six months. There was an after tax loss of $6 million compared to an after-tax profit of $6 million for the quarter ending September 2019. The six month figures stood at a loss of $13 million and a profit of $23 million respectively. The General Manager notes the impact of the one-off finance cost pushed the charge for the quarter to $36 million, without which the company would have generated a profit around $20 million.  The company reported profit of $25 million or ten cents per share in the December quarter, up from $6.5 million in 2019, with sales rising moderately from $603 million to $626 million.
While ICInsider.com is projecting ongoing earnings of 30 cents per share for the fiscal year to March. The performance is expected to improve, with earnings of 80 cents per share for the 2022 fiscal year.
The company had net current assets of $374 million, inclusive of cash and bank balances of $23 million at the end of September, a 271 percent increase over the company’s cash position at the end of September 2019. Total equity stood at $846 million with borrowings of $735 million.
Medical Disposables ended the calendar year at $4.25 at the end of December and traded at $4.20 on Friday with earnings of 60 cents per share. Investment in the stock is not without some risk in the short term, but there could be upside surprises if the company attracts new business lines as they have been doing in recent years.
Caribbean Assurance Brokers – EPS 35 cents Current PE 5
According to the Chairman’s report decline in commission in all four divisions as well as a delayed renewal period for the international health insurance product, contributed to sluggish revenue for the period to September 2020. Total revenue for the quarter dropped 61 percent to $79 million and down by 37 percent for the nine months to $23 million. The company recorded a loss of $10 million, a drop from a profit of $62 million for the corresponding quarter in 2019. For the six-month period, losses stood at $23 million, down from a profit of $57 million recorded at the end of September 2019. Shareholders equity stood at $278 million at the end of September 2020, up from $230 million at the end of December 2019. CAB has net current assets of $107 million, a 12 percent increase over the corresponding period.  At the close of 2020, the stock traded at $1.89 and at $1.76 on Friday, with earnings per share of 25 cents for 2020.
Access Financial – EPS 2.70 cents Current PE 7.6
Access Financial is the classic case where looking ahead rather than focusing heavily on the recent past can pay off richly. The advent of Covid-19 in Jamaica meant dislocations for many businesses and loss of jobs. Access had to face this onslaught head-on resulting in a massive increase in provisioning for expected credit losses. Most of that seems to be behind them now, with the September quarter showing recoveries of some doubtful loans and lower provisions made for additional expected losses. The company still provided $111 million in the quarter for doubtful debt and $178 million for the six months, compared with $105 million and $185 million in 2019 respectively and made further provision of $111 million in the December 2020 quarter, putting total provisions around $800 million and covering more than half of loans overdue for up to 30 days. This is an indication that provisions in the near future could be much more moderate than in the past two years.
Profit suffered in the current fiscal year as net profit fell 75 percent to $28.5 million for the September quarter and 77 percent to $62 million for the six-month period. For the December quarter, Profit before taxation rose to $94 million from $33 million in the September quarter, compared to $121 million in December 2019 after another round of heavy loan loss provision.
Net operating income fell 20 percent for the six months at $887 million and 20 percent from September 2019 at $457 million, but the latter was an improvement on the June 2020 quarter of $430 million, by six percent. For the December quarter, it grew to $460 million. Meanwhile, at $370 million, total interest income fell 12 percent from the September 2019 quarter versus 2019, but was down only two percent from the June quarter and increased further to $387million in the December quarter.
At the end of September, Loan receivables were down 13 percent to $3.9 billion from $4.47 billion at March 2020 and $4.4 billion at the end of September 2019 as the company increased bad debt provision curtailed lending up to that point. Loans advanced rose to just over $4 billion, which is an encouraging sign in pursue of an increase in revenues and profit going forward.
Shareholders’ equity stood at $2.3 billion. The company had loans payable of $2.65 billion, down from $3.1 billion in December 2019 and $3.2 billion at the end of March 2020. Cash and cash equivalents ended at $555 and total assets at $5.5 billion.
The stock ended trading in 2020 at $23.50 and traded at $21 on Friday. With earnings of $1 per share projected for the current fiscal year that would result in a PE ratio of 21 and a 2022 forecast of $2.70 per share, suggesting good potential upside for the stock price.

Stationery & Office Supplies hit a record high on Friday.

Stationery & Office Supplies – Montego Bay office.

Stationery and Office Supplies – EPS 70 cents Current PE 6
Gross profit was down 19 percent for the quarter and 26 percent for the nine months ending September closely matching the fall in sales that fell 18.6 percent to $240 million from $295 for the quarter and down 24 percent to $712 million from $933 million for the nine months to September 2020. Net profit for the quarter fell 70 percent to $7 million and 75 percent for the nine months to $29 million.
The Board of Directors notes that its third-quarter corresponded with a surge in COVID-19 cases in Jamaica. Despite falling below 2019 numbers, the company managed to improve its performance over the June quarter. SOS also acquired property on the adjoining lot and finished its new warehouse, a sign of expected growth in operations going forward.
Shareholders’ equity increased by five percent to $625 million, but net current assets fell by nine percent to $343 million, with a strong cash position of $112 million, up from $87 million at the end of September 2019 and $62.5 million at the end of December 2019, the company is set to weather the continued COVID storms.
The company should be seeing improved results in 2021, with schools and some businesses reopening, especially since June last year. The company should be seeing marked improvement in numbers in the March to September periods compared to 2020, when many businesses closed or operated with reduced activities.
The company’s stock traded at $4.54 at the end of December and on Friday at $4.50 with expected earnings of 20 cents per share for 2020. The stock is about fully valued but undervalued based on improved 2021 earnings.

Jamaican Teas traded the most shares on Thursday

Jamaican Teas CEO John Mahfood

Jamaican Teas – EPS 30 cents Current PE 11
The company enjoyed increased profit with interim results for the December first quarter of the 2021 fiscal year show sales rising 41 percent to $611 million and profit attributable to shareholders jumping 321 percent to $117 million from just $28 million in 2019.
The highlight for the quarter was the strong gain in export sales of 88 percent over the prior year. This contributed to manufacturing sales climbing 48 percent to $428 Million for the quarter.
What is known subject to continuity, since the end of the 2020 fiscal year, QWI Investments net asset value has gained 15 cents or around $200 million and with more apartment sales to be completed in the second quarter, the group should see these contributing to profit subsequent to the December quarter.
The group has borrowings of $432 million and cash funds of $317 million at the end of December. Investments amount to $1.7 billion with shareholders’ equity of $1.8 billion.
After a three-to-one stock split in November last year, the company enjoys increasing buying interest, with the price hitting record highs in recent weeks. Jamaican Teas ended the calendar year with the stock at $1.99 and traded at $3.35 on Friday. It is the leading Junior Market stock for the year to date.
General Accident – EPS 90 cents Current PE 5.6
Last year, the group recorded results of the Trinidad subsidiary, for the full year, compared to a few months in 2019, and the Barbados startup, for a shorter period. Up to the second quarter, the company seems to be bettering the operating performance of 2019 but clams provisions relating to Trinidad subsidiary. The full-year results showed profit down to 32 cents per share at $323 million for shareholders of the company.
Net premiums earned increased by 3 percent from $801 million to $823 million for the December quarter and by 14 percent from $2.45 billion to $2.8 billion for the year. Gross premium income jumped 52 percent from $1.78 billion to $2.7 billion in the final quarter and 12 percent from $10.7 billion to $12 billion with insurance ceded rising sharply. Claim expenses rose in the quarter from $218 million to $428 million and for the year by 49 percent from $1.2 billion to $1.79 billion. Management expenses slipped by 4 percent for the quarter to $348 million from $361 million and rose 21 percent for the year from $992 million to $1.2 billion. Investment income dropped for the quarter from $116 million to $61 million and fell from $230 million to $202 million for the year. Other income also fell in both periods, with the year ending at $19 million from $202 million.
It is the performance in 2021 that is important and that should climb nicely with the expansions getting more matured, while the Jamaican operation continues to add to profit.
Shareholders’ equity was $2.6 billion at the end of December. The company traded at $6.19 at the end of December and traded at $5.30 on Friday with earnings of 32 cents per share.

Lumber Depot dominated trading with

Lumber Depot – EPS 22 cents Current PE 12.5
Lumber Depot operates a full-service hardware store and acquired the assets and liabilities of the Lumber Depot business from the Blue Power Group effective August 2019.
Net profit jumped 76 percent for the October quarter from $20.5 million to $36.1 million and ended at $66 million for the six months to October 2020, representing a 79 percent increase from the corresponding period in which the business operated in the prior half in its own right as under the Blue Power group for a quarter.
The company recorded revenue of $338 million for the quarter, a seven percent year-over-year improvement. Administrative expenses fell 15 percent to $39 million for the quarter ending at $77 million for the half-year.
“We have had downturns in some areas that have impacted us, such as the Gordon Town Road collapse but we are able to see improvements in sales in other areas that have helped to balance any shortfalls.  Revenues and profits continue to be steady similar to the 2nd quarter which you will see when our next set of financials are published, “ the company’s Chief Accountant, Adrienne Jones, informed ICInsider.com in response to a request about the company’s operations currently.
Shareholders equity grew by 34 percent to $258 million from $192 million at the end of April 2020. The stock price was $1.56 at the end of December and traded at $2.50 on Friday. Earnings per share came in at 5 cents for the quarter and nine cents for the half-year is projected by ICInsider.com at 20 cents for the current fiscal year and 22 cents for the 2022 fiscal year.
Lasco Distributors – EPS 40 cents Current PE 8.5
Profit before taxation increased by 55 percent year-over-year for the December quarter moving from $188 million to $291 million. Pre-tax profit for the nine months climbed 41 percent from $618 million to $870 million. Taxation tripled for the quarter to $48 million and more than doubled for the nine-month period from $60 million to $139 million, leaving net profit rising 41 percent from $172 million to $243 million for the quarter and by 31 percent to $731 million for the nine months.
Revenue improved by six percent for the quarter to $5.2 billion and for the nine-month period to $15.2 billion. Operating expenses declined by 11 percent for the quarter and 12 percent for the nine months to $663 million and $2.02 billion, respectively, as management focused on cutting cost.
The company does all the sales for the manufacturing company; as such improved sales by them will positively impact revenues and profit.
Cash and investments climbed to $2.3 billion at the end of 2020, while shareholders equity stood at $6 billion at the end of December 2020 while borrowings were negligible. Lasco Distributors last traded at $3.68 on Friday with projected earnings of 30 cents per share to March and 40 cents for 2022.

Mailpac – EPS 30 cents Current PE 12
The Group continues to enjoy increasing strong profit growth despite the current pandemic, with revenue jumping 58 percent in the September quarter over the 2019 quarter, with profit more than doubling, helped by a is healthy profit margin at 62 percent. Revenues climbed from $301 million to $477 million and grew a stunning 30 percent over the June 2020 quarter with $366 million. For the year to September, revenues rose to $1.2 billion, 42 percent more than the $851 million recorded at the end of September 2019.
The company recorded a net profit of $149 million for the quarter, a solid 129 percent jump from the $65 million recorded for the September 2019 quarter. For the year-to-date, there was an even more sizeable growth of 150 percent, moving from $203 million in 2019 to $339 at the end of September 2020.
For the full year to December, Mailpac reported a 42 percent increase in revenues for the December quarter with a $512 million realised profit of $104 million, up from $97 million pretax for 2019. Cost of sales jumped 70 percent for the final quarter, much higher than the increase in revenues. Profit for the year ended at $443 million, with earnings per share of 18 cents with the increased direct cost in the final quarter robbing it of greater earnings. IC Insider.com believes that this type of business will continue to grow as persons are attracted to the convenience that the service affords.
At the end of December, cash and equivalent stood at $292 million, while Shareholders’ equity stood at $571 million with little or no borrowings. A dividend of 6 cents was declared, payable in March and brought the total for the year to 15 cents.
The stock ended 2020 trading at $2.87 at the end of December and traded at $3.75 on Friday but traded as high as $4.43 in February before pulling back to close at $3.75 on Friday. ICInsider.com projects earnings per share of 30 cents for 2021.

Cost cuts drive Lasco Manufacturing profit

Sharp cost-cutting and moderate growth in revenues drove profit at Lasco Manufacturing up 29 percent for the December quarter and 30 percent for the nine-month period.
The performance was even more stunning, with pretax profit jumping a very strong 43.4 percent for the quarter and 36.7 percent for the nine months to $1.3 billion as the company profit became subject to full taxation as of October 12 in 2020.
The company maintained a gross profit margin at 36 percent in the quarter, compared to 2019 but enjoyed an increase to 38 percent for the nine months from 37 percent in 2019. It ended the 2020 fiscal year at 37 percent suggesting the 2021 full-year results will most likely end at 38 percent, in line with the nine months’ margin.
The company reported revenues rising 6 percent for nine months to $6.2 billion but up just 3.5 percent to $2.07 billion for the December quarter. Administrative and other costs fell 20 percent for the quarter to $315 million and for the nine months to December by 12 percent to $982 million.
The principal activities of the company are the manufacturing of soy-based products, juice drinks, water and packaging of milk-based products.

Lasco Manufacturing products

Shareholder’s equity stood at $7.5 billion at the end of December 2020 and borrowed funds dipped to $949 million of which $453 million is due for payment within a year. Cash funds and investments amount to $1.7 billion after the company generated funds before working capital and capital financing needs of $1.5 billion. A dividend of $251 million was paid during the nine months.
Lasco generated earnings per share of 25 cents for the nine months up from 19 cents in 2019, while the quarterly 2020 earnings came in at 7 cents. ICInsider.com projects earnings per share at 35 cents for the year to March and 40 cents for the 2021 fiscal year.
The stock last traded at $4.32, with a PE ratio of 12.3. The stock is undervalued based on the earnings and an average market PE of 15 and a target PE ratio of 20 that many stocks are currently trading around. The target price of $7.

IC TOP10 stocks to drive JM over 2800

The Junior Market is expected to blast pass the 2,800 the index mark, this coming week, following positive results just released by Lasco Manufacturing, Lasco Distributors and Jamaican Teas, to help the market to continue the 2021 rise after reaching a new eleven-month high, on Friday.
The market index closed just under 2,800 points, on Friday with a 5.8 percent gain for the year to date.
The market should continue to benefit from strong interest in Caribbean Flavours, Mailpac that traded at a record high on Friday at $4.43 before closing at $3.99 and from Lumber Depot.
Lasco Manufacturing and Honey Bun keep changing places in IC TOP10 best performing Junior Market stocks. At the close of the previous week, Lasco Manufacturing replaced Honey Bun, but this past week, the roles are reversed with both companies seeing a reversal of fortune in prices.
Lasco Manufacturing closed at $4.32 up from $3.90 last week, while Honey Bun price fell from $6 to $5.88. In addition, Lasco earnings per share were adjusted down to 35 cents from 37 cents, with the company reporting nine months results showing revenues rising 6 percent but being up 3.5 percent for the December quarter and earnings per share moving to 25 cents from 19 cents in 2019. Lasco Distributors earnings were also adjusted down, with the release of the nine months results showing earnings per share of 21 cents and 7 cents for the December quarter, putting the full-year numbers at 30 cents per share.
The Main Market TOP10 stocks continue with the same stocks as the week before, but Grace Kennedy price continues upward as interest in the stock remains strong.
The Junior Market is up 5.8 percent for 2021 and is currently powered by a bullish golden cross, setting to take the market beyond 3,000 points and likely beyond 4,000. The release of company results in the next week will play a big role in the next few weeks that will add fuel to the current rally. In this regard, based on 2020 release of results, interim financials are expected this week, from Access Financial, Barita Investments, General Accident, Iron Rock Insurance, Lasco Financial, Fontana, Elite Diagnostics, Honey Bun, JMMB Group and RJR.
The current TOP 10 report is based on earnings for 2020/21 as there are substantial gains ahead, for many stocks in the listings.
The top three Junior Market stocks with the potential to gain between 208 and 373 percent are Caribbean Producers followed by Elite Diagnostic and Lasco Financial. With expected gains of 132 to 324 percent, the top three Main Market stocks are, Berger Paints followed by Scotia Group and Sygnus Credit Investments.
The local stock market’s targeted average PE ratio is 20 based on profits of companies reporting full year’s results, from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating strong gains ahead. The JSE Main Market ended the week, with an overall PE of 18.8 and the Junior Market 15, based on ICInsider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 8.3 at just 55 percent of the market average. Main Market TOP 10 stocks trade at a PE of 9.1 or 48 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 169 percent and 133 percent for the JSE Main Market, based on 2020-21 earnings. IC TOP10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. 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.

Lasco Manufacturing hits IC TOP10

Lasco Manufacturing returns to IC TOP10 best performing stock in the past week, replacing Honey Bun closing at $6 in a week that the Junior Market climbed to a new eleven month high and posted a five percent gain for the year to date.

While the Junior Market had a new addition, the Main Market TOP10 continued with the same stocks as the week before but Grace Kennedy price rose from $68 to $73.45 with the stock moving from 5th spot to 7th.
The 2021 winner to date, Jamaican Teas lost a cent this past week after trading at a record high of $3.04 and moved down to the ninth spot this week with the price closing at $2.88 on Friday. Caribbean Cream price closed at $4.50 down from $4.95 at the end of the previous week to sit at 7th spot now. Lumber Depot one of the better Junior Market movers held at $1.95 after hitting $2.12 during the week to remain at eight position.
The Junior Market is up 4.9 percent for 2021 and is currently powered by a bullish golden cross, setting to take the market beyond 3,000 points. The release of company results in the next two weeks will play a big role in the next few weeks that will add fuel to the current rally. In this regard, based on 2020 release of results, interim financials are expected this week, from Access Financial, Barita Investments, Iron Rock Insurance, NCB Financial, the Lasco group of companies and Jamaican Teas.
The Main Market continues to slip in January, but technical indicator points to it heading towards the 460,000 points level on the All Jamaica Composite Index, in months.
The current TOP 10 report is based on earnings for 2020/21 as there are substantial gains ahead, for many stocks in the listings.
The top three stocks in the Junior Market with the potential to gain between 196 to 381 percent are Caribbean Producers followed by Elite Diagnostic and Lasco Financial. With expected gains of 135 to 315 percent, the top three Main Market stocks are, Berger Paints followed by Scotia Group and Carreras.
The local stock market’s targeted average PE ratio is 20 based on profits of companies reporting full year’s results, from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating strong gains ahead. The JSE Main Market ended the week, with an overall PE of 18.9 and the Junior Market 14.8, based on ICInsider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 7.8 at just 53 percent of the market average. The Main Market TOP 10 stocks trade at a PE of 9.1 or 48 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 181 percent and 132 percent for the JSE Main Market, based on 2020-21 earnings. IC TOP10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. 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.

Lumber Depot weekly IC TOP10 winner

Lumber Depot is IC TOP10 best performing stock in the past week with the price surging to $2 from $1.46 at the end of the previous week to close at $1.95 on Friday with a 32 percent rise. Jamaican Teas was next moving from $2.48, scaling a number of record highs to close with a gain of 16.5 percent for the week with the price closing at $2.89 on Friday.

Lumber Depot is the JSE stock gaining the most in the past week.

Caribbean Cream is the other Junior Market stock to post good gains for the week, with the price closing at $4.95 from $4.70 at the end of the previous week.
The Junior Market is up 4 percent since the 2020 close, that may not appear to be much, but if the gains continue at this pace for the rest of the year, the market will gain 67 percent get to more than 4,400 points. The market is currently powered by a bullish golden cross, setting to take the market beyond 3,000 points. The release of December results will play a big role in the next few weeks that will add fuel to the current gains.
The Main Market continues to slip in January, but technical indicator points to it heading towards the 460,000 points level on the All Jamaica Composite Index, in months.
The current TOP 10 report is based on earnings for 2020/21 as there are substantial gains ahead, for many stocks in the listings.
This week’s focus: Tropical Battery released audited accounts that saw profit dropping well below the $73 million initially reported by the company to just $29 million with the stock selling off to a low of 95 cents but bounced a bit thereafter.
Increase in taxation, depreciation and finance cost, were the main reasons for the decline in profit. ICInsider.com projects 8 cents per share earnings for the current year.
The audited accounts state that 1.3 billion shares are issued by the company, but further on in the note on share capital, it reports that a resolution was passed to increase the share capital by subdividing 250,000 the then issued shares by 4,550, resulting in 1.130 billion shares, instead of 1.1375 billion units that were issued. The note also suggests that the company issued 325 million shares to the public but omits to state that a portion was sold on behalf of existing shareholders.
The top three stocks in the Junior Market with the potential to gain between 208 to 363 percent are Caribbean Producers followed by Elite Diagnostic and Lasco Financial. With expected gains of 124 to 331 percent, the top three Main Market stocks are, Berger Paints followed by Scotia Group and Carreras.
The local stock market’s targeted average PE ratio is 20 based on profits of companies reporting full year’s results, from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating strong gains ahead. The JSE Main Market ended the week, with an overall PE of 17.1 and the Junior Market 15, based on ICInsider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 7.9 at just 53 percent of the market average. The Main Market TOP 10 stocks trade at a PE of 9.3 or 55 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 174 percent and 127 percent for the JSE Main Market, based on 2020-21 earnings. IC TOP10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. 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.

45% gains for ICTOP15 stock

Robust gains for some stocks after less than a month of trading in 2021 have shaken up ICTOP 15 stocks forcing a number of them out or at the edge of moving out of the 2021 TOP list. Jamaican Teas now the lead stock for the year, dropped out of the Junior Market list this week, with a rise of 45 percent since the start of the year.

Jamaican Teas is the leading JSE stock for 2021 to date with a 45% increase in price. 

This brings to two, stocks that have migrated from the Junior Market TOP15 so far. Jamaica Producers fell out of the Top 15 Main Market list with the price dropping to $19.81, from $21 but Margaritaville suffered a greater fall to replace it.
Jamaican Teas one of the top 15 stocks for 2021 scaled record highs this past week as more and more investors piled into the stock since the three for one stock split in November last year. The gain also follows the directors’ report for the September quarter results that stated  “Subsequent to the year-end, overall sales increased by 47 percent in October 2020, with export sales increasing 85 percent and a 10 percent increase in domestic sales. We have good orders in hand for November and these developments, along with booking of more real estate sales, hopefully, improvement in the investment portfolio should result in a good first quarter for the financial year 2021.”
Mailpac was the first to drop out of the list and now has gains of 29 percent so far in 2021. Lumber Depot surged to $2.10 on Friday but closed at $1.95 from $1.46 last week and now sits at 15th spot on the Junior Market TOP15 for 2021, with a 25 percent gain for the year to date. Reports in the newspapers indicate bullish sales expectations from Caribbean Cement and rising prices for some construction inputs.

MailPac is the Junior Market second-best performing stock for 2021.

The news pushed investors to snap up Lumber Depot stock and drove the price much higher, since. QWI Investments is up 17 percent since the end of last year to trade at 90 cents with the net asset value rising since the latter part of last year to sit at $1.18 as gains in both local and overseas stocks continue to add to the value of the company’s portfolio. The stock is now at 14th spot on the Main Market list. A large number of shares were overhanging the market and pressuring the stock price. Once they were bought out, the supply has shrunken leaving room for the price to recover.
Caribbean Cream posted eleven percent growth in sales for the November quarter and eight percent for the nine months, with profit rising 96 percent for the nine months and a 37.5 percent increase for the third quarter. The stock is up 18 percent for the year at the close on Friday and remains at the seventh position on the 2021/22 TOP15 list.
With interest rates at low levels on government bonds and expected to remain low for a protracted period, investors are becoming more comfortable with PE of 20 times earnings or more, according to the TOP 15 rankings the above stocks still have room to gain over 90 percent from the current price for the rest of the year.

It pays to read ICInsider.com.

Mailpac drops out of IC TOP15 stock listing

Stocks left to languish at depressed prices for months are coming back to life as some investors are now seeing the light of the huge potential profit in Junior Market stocks compared to their senior counter paths in the Main Market.
The Main Market slipped a bit to end the first half of January, with a modest loss but technical indicator points to it heading towards the 460,000 points level on the All Jamaica Composite Index, soon. The Junior Market is up 2.4 percent since the 2020 close and is a few points away from the level reached at the close of March 5 last year, having surpassed the April high, as the bullish golden cross takes full hold on the market to launch a big rally.
During this past week, IC TOP 15 selections MailPac, Caribbean Cream and Jamaican Teas all posted gains with Mailpac hitting a series of record highs this past week and closed at $3.75 up 30.6 percent since the end of 2020 and is now well outside of the 2021 Top 15 list for Junior Market stocks. The stocks still have much room for growth in the year to benefit from a strong increase in revenues. Caribbean Cream posted continued growth in sales for the November quarter and almost doubled profit for the nine months period and increased it by 37.5 percent for the third quarter. The stock gained 50 cents at the close on Friday but traded as high as $5 during the week and moved from fifth spot last week to ninth position on the 2020/21 TOP10 list. Jamaican Teas gained 25 percent since December and seems poised to move higher as interest in the stock grows since the announcement of a three for one stock split late last year. An indication of increased interest is the exchange of 4 million shares on Friday. The stock moved from the fourth position last week to seventh this past week as it gained 24 percent for the week.
Lasco Manufacturing rose in the past week and moved out of the TOP10 Junior Market ranks, with Honey Bun replacing it.
The current TOP 10 report is based on earnings for 2020/21 as there are substantial gains ahead, for many stocks in the listings.
Investors should be on the lookout for new quarterly results with Express Catering and Margaritavillle and should release results this week. Before the month ends, expect results from Caribbean Cement, QWI, NCB Financial, Barita and the three Lasco companies.
The top three stocks in the Junior Market with the potential to gain between 208 to 373 percent are Lasco Financial, followed by Caribbean Producers and Elite Diagnostic. With expected gains of 125 to 315 percent, the top three Main Market stocks are, Berger Paints followed by Grace Kennedy and Jamaica Broilers.
The local stock market’s targeted average PE ratio is 20 based on profits of companies reporting full year’s results, from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating strong gains ahead. The JSE Main Market ended the week, with an overall PE of 16.4 and the Junior Market 14.6, based on ICInsider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 7.6 at just 52 percent of the market average. The Main Market TOP 10 stocks trade at a PE of 9.2 or 56 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 185 percent and 130 percent for the JSE Main Market, based on 2020-21 earnings. IC TOP10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. 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.