Good news push TOP 10 stocks

There were no new entrants this past week, to the TOP 10 list of stocks on the Jamaican Stock Exchange, but there was some good news with the acquisition by Stationery and Office Supplies of a book making business.
The acquisition is set to add to profit in year one, and investors responded by driving the stock to a new high. The stock that was facing some challenge to get bids around the $5.50 level, the stock traded at in the past few weeks, jumped to $6 on the same day the announcement was made. With annual sales estimated around $130 million that could rise with greater focus on the operations and more capital available to support it, IC Insder.com has up graded the earnings to 90 cents for this year. The company is one of a number of Junior Market listings expected to post positive gains in the 2018 first quart over that of 2017.
The other good news for the market was a further fall in Treasury bill rates and another month of slightly negative inflation for March with the first quarter inflation also being negative. While the main market hit two new record highs during the week. While the JSE main market is caught up in a wedge formation and waiting for a big break out which could happen any time, the Junior Market that was in a downward drift from late 2017 now seems to have support from the 200 day and 120 day moving averages with the short term moving average now above both longer term ones. The market is being steered by two support lines with one going back to 2010 and another going back to early 2014.
Investors pressured recently listed Elite Diagnostic during the week as they reacted negatively to the December quarter results with lower profit that the previous year’s results. Investors seemed to have responded the Berger Paints bullish reading in the annual report as they bought the stock in increasing volumes during the week, leaving the price at $19. The Managing Director had reported that “the outlook for 2018 and beyond is extremely positive. The Berger brand remains strong and continues to dominate the local market with strong brand equity and a reputation for quality. With GDP projected to grow by at least 1.5% in 2018, construction activity and the demand for coatings is expected to remain relatively strong for the next two to three years. Plans are already being implemented to expand the company’s local distribution and product range as well as to improve our level of customer service and responsiveness. In 2018, there will also be greater emphasis on building out exports by targeting new markets in Central America and the Greater CARICOM region.”
Palace Amusement continues to enjoy expanded interest from investors with the continued success of the movie Black Panther. After more than two months of showing it still has two showings per day in all three cinemas, but the attraction for the stock is much more than this movie.
Strong buying came in for Barita Investments at $9.50 during the week. JMMB Group gained more ground, as the block out period for insiders to trade in the stock closes and the stock moved up to $28.32, resistance is just over $31 an area investors should be on the lookout for in the short run.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6 compared to an average PE for the overall main market of 10 based on 2018 estimated earnings. The main market PE remains at 7 for the top stocks, compared to a market average of 12.7.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 40 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 42 percent to the market.

Standoff for TOP 10 stocks

Berger Paints annual report had some good news for investors to digest.

The up and down nature of the markets this past week left most stocks fairly stable resulting in no new entrant to the TOP 10 list of stocks on the Jamaican Stock Exchange.
The past week got greeted by a series of company results that were not inspiring with most reporting lower profits for the first quarter this year. On a positive note, most of the results were affected by increased cost resulting from expansion ahead of full flow of new income from the expanded facilities.
Companies affected include recently listed Elite Diagnostic, Paramount Trading and Knutsford Express. Berger Paints released their annual report that was filled with some good talk of going after market share, new product lines to be added and upgrading of equipment to increase efficiency.
“The outlook for 2018 and beyond is extremely positive. The Berger brand remains strong and continues to dominate the local market with strong brand equity and a reputation for quality. With GDP projected to grow by at least 1.5% in 2018, construction activity and the demand for coatings is expected to remain relatively strong for the next two to three years. Plans are already being implemented to expand the company’s local distribution and product range as well as to improve our level of customer service and responsiveness. In 2018, there will also be greater emphasis on building out exports by targeting new markets in Central America and the Greater CARICOM region,” the Managing Director reported.
For Palace Amusement with the bid at $781 at the close of the week down to $750 the movie Black Panther continues to pull in the crowd after two months of showing and still has two showings per day in all three cinemas, the same as shows that opened during the past week.
Barita Investments rose to close the week at $9.50 as investors sucked out most of the supply under $10. Key Insurance fell to $3 as the company reported that two directors sold shares during the week, while JMMB Group gained more ground, as the block out period for insiders to trade in the stock, comes to a close, until after mid May.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.2 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings. The main market PE remains at 6.5 for the top stocks, compared to a market average of 12.3.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 39 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 47 percent to the market.

Kremi in tTech out of TOP 10 stocks

 

Caribbean Cream outlet in Kingston.

Caribbean Cream jumped into the Junior Market TOP 10 replacing tTech that reentered last week but enjoyed a bounce in price to be edged out for this week.
There was no new entrant to the main market list, even as that market recorded three days of record close during the shortened week. Market activity in the main market is pointing to a big break out for stock prices while the Junior Market is flexing to rise having hit a one year low in early December last year.
The most notable change was the $250 fall in the price of Palace Amusement down to $750 from $1,000 last week even as the big money making movie Black Panther continues to draw large crowds after nearly two months of showing and seems set to ensure that revenues and profit for the year to June is the highest by far in the company’s history.
Berger Paints made gains and Barita Investments slipped in price and swapped the top two positions by the end of the week. In the Junior Market, Jamaican Teas moved up to $5.30 from $4.75 at the end of the prior week but still sits in at number 4 on the list.
Caribbean Cream recorded strong revenues gain in the year to February but enjoyed lower profit up to November as input cost rose negated the revenues rise. A major part of the input cost well sharply in price since peaking in 2017 and should help restore gross profit margin going forward. This is one to be watched going forward along with Radio Jamaica where reports are that advertising picked up nicely for the March quarter, from a slow December quarter and may be pointing to improvement for 2018 onwards, with increasing economic activity taking place, leading to increased sales and profits for many of the advertisers.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.2 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings. The main market PE is 6.5 for the top stocks compared to a market average of 12.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 38 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 47 percent to the market.

tTech is back Carib Producers exits TOP 10

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tTech is a new entrant to the Junior Market TOP 10 stocks and replaces Caribbean Producers that has been in the TOP 10 for several months.
Caribbean Producers closed at a 52 weeks high of $5 at the end of last week and fell out of the TOP 10. PanJam Investment price moved to $43 and just held on in the main market TOP 10. The price of Palace Amusement fell during the week to end at $1,000 and moved up on the top ten list as a result. Caribbean Cement price dropped sharply from $42 in the previous week to $35, but closed with the bid at $37.95 and moved into the number 5 spot as a result.
Cable & Wireless is unofficially the number one rated stock in the main market list based on IC Insider.com forecast, of profit for the current year, flowing from increased revenues and a sharp fall in interest cost. Uncertainty surrounding continued listing keeps it off the official list.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.5 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings. The main market PE is 6.6 for the top stocks compared to a market average of 12.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 36 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be, 20 times earnings and main market stocks traded at a discount of 46 percent to the market.

Palace is back NCB out of TOP 10 stocks

 

New contents at Palace Amusement .

Palace Amusement is back in among the top stocks, after falling out at the end of the previous week, with the stock now offered for sale at $1,120, below the last sale price of $1,300.
There is still no new entrants to the junior market TOP 10, for the second week in a row, as there has been only moderate price changes in that market.
A new element in the market this past week, is the payment to some former Cable & Wireless shareholders who collected nearly $2 billion in cash. Most of these funds are likely to go back into the market that is short on supplies.
The price of NCB Financial rose by the end of the week and moved out of the main market top stock list. Caribbean Cement that has languished just above the $30 level for months has broken into the $40 range and moved down to the second half of the list. The sharp price change follows an announcement that the company signed an agreement to buyback leased assets during this year. The buyback is set to save around $2 billion per annum before tax.
Palace Amusement revenues and profit, are getting a big lift from the strong showing of the Black Panther movie being shown currently. The stock’s attractiveness is not based solely on that development. Data shows the company’s revenues have been rising well since 2014 when it hit $833 million, rising to $916 million in 2015, while there was a slight dip in 2016 to $909 million, it rose 9 percent in 2017, to $990 million. Revenues for the half year to December last year grew 11 percent to $493 million and profit rising 138 percent, continuing the normal annual growth. Revenues will hit the billion mark for the first time in the company’s history, for the current fiscal year and remain over that level going forward. The performance of the economy is critical to the future fortunes and to a lesser degree, the quality of films. Data shows that with tight economy, patronage in Kingston suffered badly with the fall in the economy from in 2008 onwards. At the same time strong growth said to be around 7 percent per annum in the Montego Bay economy, shows up in strong revenues gains there compared to Kingston. With the overall economy recovering, Palace is benefitting.
PanJam Investment for 2017, reported a 29 percent rise in profit to $4.13 billion and in earnings per share of $3.93 from continuing operations. The group is expected to continue to enjoy increased earnings in 2018 and the focus on expansion of new projects will be beneficial to them going forward.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.3 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings. The main market PE is 6.8 for the top stocks compared to a market average of 12.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 37 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be, 20 times earnings and main market stocks traded at a discount of 44 percent to the market.

Entities associated with IC Insider.com owns shares in Palace Amusement Company and Caribbean Cement.

Express Catering Q3 profit jumps 105%

Ian Dear, Managing Director of Express Catering

Profit for Express Catering jumped 105 percent in the February quarter, to US$1.14 million from US$558,267 in 2017. For the nine months to February, profit surged 166 percent to US$2.52 million from US$947,989 in 2017.
Sale revenues rose 9.7 percent for the quarter, to US$4.39 million from US$4 million and rose 12.44 percent for the year to date, to US$11.27 million from US$10 million in 2017. Revenues benefited from strong increase in visitor arrivals during the period around 10 percent.
Gross profit margin remained stable at 74 percent in the quarter and 73 percent for the nine months with gross profit of $3.25 million for the quarter up 10 percent from $2.96 million in 2017 and $8.28 million for the year to date 11 percent more than $7.46 million in 2017.
Depreciation fell 8 percent in the quarter to US$128,754 million and was 4 percent lower for the year to date, to US$400,475.

Starbucks one of the brands Express Catering will sell at the Montego Bay Airport.

Administrative expenses fell 14 percent to US$1.87 million in the quarter and fell 13 percent in the nine months period to US$5.05 million. Finance cost rose 18 percent in the quarter, to US$112,418 and moved just 1 percent for the nine months period to US$287,176 from US$283,625.
Earnings per share came out at 0.07 US cents for the quarter and 0.154 US cents for the nine months and should end the fiscal year ending to May around 0.24 cents or 30 cents Jamaican.
Gross cash flow brought in US$3 million but growth of $1.49 million in amounts owing by related companies, additions to fixed assets of US$303,103 and paying US$1.5 million in dividends, reduced cash to just US$34,145 at the end of the period.
At the end of February, shareholders’ equity stands at US$5.56 million with preference shares of US$3.5 million. Current assets ended the period US$5.68 million of which amounts due from related parties amounts to $5.3 million and I up from US$3.6 million in the prior year. Current liabilities amounted to US$1.5 million.
The company will be rolling out the Starbucks Coffee stores in the final quarter and that should boost revenues and profit in the new fiscal year.
The stock traded at J$4.50 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 15 times 2018 earnings. The company will go into a new year, come June, that should result in a lowering of the PE with IC Insider.com forecasting 48 cents per share for PE of 9 times earnings.

Palace, Grace out NCB & PanJam in TOP 10

There were no entrants or exists from to the Junior Market TOP 10 list but Palace Amusement more than doubled during the week rising 132 percent and left the list along with Grace Kennedy that rose to $51.50. The two are replaced by NCB Financial and PanJam Investment.
PanJam released 2017 audited financial statements with increased earnings of 29 percent to $4.13 billion, from ongoing operations resulting in earnings per share of $3.93. The group is expected to continue to enjoy increased earnings in 2018.
The main market hit record highs during the week but pulled back as the market move closer to resistance level in a long term channel. It just a matter of time for the break out to take place, regardless the channel points upwards for the market. Profit results for 2018 first quarter, will be important in helping to fuel the break out but with Treasury bill rates falling to 3.16 percent on the 182 days instrument during the past week, an important leg for a rally to come, is in place.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.3 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings. At the same time the main market ended the week with a PE of 6.7 for the top stocks compared to a market average of close to 12.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 37 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be, of 20 times earnings and main market stocks traded at a discount of 45 percent to the market

Iron Rock & 2 others in TOP 10

The Junior Market continues to fight for the 2018 rally to take root and grow even as interest rates are at their lowest in decades. Technical reading of this market shows the short term 45 day moving average (DMA) has crossed over the 120 DMA, a bullish sign as the market is coming from an oversold position.
With many Junior Market stocks having risen sharply in the last twelve months, it would require gains in profit above most of the recent postings to have pushed prices much higher in the short term. In a number of instances, some junior listed companies are focusing on expansion that will not bear fruit immediately and with some of the stocks pricing in these development into prices already, there are no new information to move prices in the short term. Results for the 2018 first quarter will therefore be critical in determining the performance of the market for the first half of the year.Stationery and Office Supplies got a shot in the arm from audited financial statements to December 2018, showing strong gains in revenues and profit, compared to 2016 and saw the price moving back up to $5.50 and its position in the TOP list down to 8 from number 2 in February. It won’t be long before it drops out of the list as demand push the price higher. General insurance underwriters Iron Rock is now in the list, following improved 2017 results that benefited from strong revenues growth that augurs well for earnings in 2018. The company should also benefit from rising premium rates. Paramount Trading is back in the list and so too is AMG Packaging having disposed of its machinery in the tissue operations and cut cost it in it as well from the closure of that business line. Going into the 2019 fiscal year it should be rid of most of the cost of that operations and therefore focus on the container boxes to meet the existing increased demand. Out goes Dolphin Cove with lower than projected earnings being reported for 2017, followed by Blue Power and tTech with lower results for 2017 than previously projected, that will likely negatively affect 2018 earnings for these companies.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.3 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 37 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be, of 20 times earnings.

$2,800 per share for Palace Amusement!

Palace Amusement seems set to be a big surprise as the stock could exceed $2,000 this year with enormous success that Black Panther is forging.
At the close on Friday the bid had moved up to $730 and should be heading higher based on the good fortune being enjoyed with the Black Panther movie. IC Insider.com projects big rise in revenues for the current quarter a sizable jump in profit as well to levels never before seen by this company. Profit for the year to June should be well into the $100 per share range as the company increase showings of the extremely popular movie but is still booked out into the future. Cable & Wireless should be the number one choice for main market TOP 10 stocks based on a nearly $2 billion reduction in interest cost this year resulting from the fall in local interest rates and increasing revenues. But uncertainty lies about continued listing on the Jamaica Stock Exchange in a year when the company is likely to see significant profit for the first time in nearly a decade.
The number one remains with Barita Investments on the basis that management will start to seriously extract the benefits of the assets that it manages. Despite the fall in profits in the December quarter for Berger Paints, from slightly lower  revenues compared to 2016, the stock is still expected to benefit from improving demand for paints as economic improvements take deeper root.
Caribbean Cement continues to struggle to break out of the $35 region but investors may have to wait until around mid-April just ahead of the first quarter results to witness a break out. Grace Kennedy results when the prior year’s one off gain from sale of investment is factored out showed continued progress in increasing profit. The stock has become scarce and seems headed for the over $50 range.
The PE ratio of the TOP 10 is 6.6 times 2018 earnings compared to 12 currently for the main market and an expected 20 by March 2019, this means these stocks have lots of room to grow.

tTech, LasFin & Blue Power in TOP 10

The Junior Market is up 7.5 percent for the year to date, helped considerably by three new listings since late December and recovery in the prices of three Lasco companies and a few others.
Investors pushed Treasury bill rates sharply down by 22 percent from 4.63 in December to 3.593 percent in February, while the central bank cut their overnight rates in sympathy to 2.75 percent. On the other hand profit results of companies have been mixed with some showing strong gains and others no so strong. So far stocks prices have yet to move to factor in the lower interest rates.
One company that had good 2017 results was ISP Finance but increased bad debt provisioning curtailed the growth in profits to just one percent after tax, but 20 percent ahead of the net 2016 profits with a 25 percent rise in revenues. The results for 2017 resulted in earnings per share being reduced to $1.20 for 2018 and with a rise in the stock price to $11.05 it is no longer in the TOP stocks. Also going out are, Access Financial and Paramount Trading. Access earnings have been reduced following their third quarter 2017 results.
Entering the TOP 10 Junior Market list are tTech, Lasco Financial and Blue Power. While Lasco Financial had lower profit in the December 2017 quarter than in 2016 that was due to added cost associated with the acquisition of Credi Scotia. The company will see a big jump in profit as a result of the acquisition. tTech is said to be seeing strong growth in clientele following a few years of soliciting new clients business. General Accident had a temporary setback in profit in 2017 due to a major claim but rising premium income margin should help boost profit in 2018 barring any major catastrophic claims. Key Insurance despite incurring cost associated with staff separation amounting to close to $50 million reported improved results for 2017 over 2016 and should go on to record the highest levels of profit in 2018 with expected better margin on insurance underwriting barring any unusually large claims. Stationery and Office had a record 2018 performance and is expected to show improve results in 2018 that will move the price upwards.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.3 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 39 percent to the average for the Junior Market Top stocks but its less than 50 percent of what the average PE for the year is likely to be, of 15 to 20 times earnings.