Lasco Financial Q2 profit jumps

November 2, 2020 by

Lasco Financial generated a profit of $136 million in the September quarter compared to a loss of $16 million for the 2019 second quarter. Profit after tax for the six months to September amounts to just $30 million, down from the corresponding period’s $75 million, and an improvement on the first-quarter loss of $106 million.

Lasco Financial former HQ

Earnings per share ended at 10.7 cents for the quarter and just 2.4 cents for the half-year.
For the quarter, revenues fell 5.7 percent or $38 million from the 2019 September quarter, to $617 million, due largely to a $78 million decline in revenues from loans, in the quarter following a $74 million fall in the June quarter, compared with the similar periods in 2019. Remittances grew 11 percent and added $50 million to revenues while Cambio operations contributed 10.8 percent or $34 million to increased revenues, the company’s Managing Director Jacinth Hall-Tracey, informed shareholders in a commentary accompanying the quarterly report. Revenues slipped $140 million from $1.3 billion to $1.16 billion for the six months period.
Administrative and selling and promotion expenses dropped from $1.06 billion to $961 million for the half-year and from $585 million to $400 million for the September quarter. Finance cost for the quarter slipped slightly from $48 million to $45 million and from $96 million to $95 million for the six months. Expenses include loan loss provision of $152 million for the six months compared to $262 million in 2019, and effectively there was an $18 million recovery of doubtful loans in the September quarter.

Jacinth Hall-Tracey, Managing Director of Lasco Financial.

In September 2019, quarter provision for loan losses was $178 million. Taxation dipped slightly, from $38 million for the quarter to $36 million, while the half-year tax provision fell from $76 million to $70 million.
The company generated positive cash flows of $389 million for the half-year, down from $514 million in 2019 and ended the periods with cash and short-term deposits that rose to $1 billion from $307 million. Loans to customers fell to $1.54 billion at the end of March from $1.83 billion at the end of the prior year-end after loan loss provisions rose from $99 million in 2019 to $328 million. Loans to customers are included in the heading of Loans and receivables of $1.6 billion at the end of September. Shareholders equity stood at $1.57 billion and Long-term debt $1.9 billion, up from $1.7 billion at the end of September last year.
The company indicates 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 the December quarter being the most profitable, ICInsider.com still holds to the projection of 60 cents per share for the full year, but even if it comes out lower, the stock that closed at $2.11 of the Junior Market of the Jamaica Stocks Exchange on Friday with a PE ratio of just 3.5 is highly undervalued and will move sharply higher.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , ,

Lasco Financial set to dominate IC TOP 10

November 2, 2020 by

Kremi and NCB Financial are back in the Main and Junior Markets IC TOP 10 lists for the week as Access Financial and Salada Foods moved out, with the former earnings downgraded following the release of half-year results while the latter recovered from the price decline suffered in the previous the week.  

Jacinth Hall-Tracey, Managing Director of Lasco Financial.

The past week belonged to Caribbean Cement (CC) that posted strong increased revenues and profit with the stock jumping 12.5 percent from $45.96 to close at $57. As was the case with CC last week, Lasco Financial is set to be a big winner this week, with the company reporting outstanding second-quarter profit that should encourage investors to pick up the stock.
The Main and Junior markets closed trading for October lower than September. Signals in the market point to higher prices ahead. The Junior Market is currently signaling a big surge that will start in a few weeks as short-term moving averages cross over longer-term ones to confirm a strong rally ahead. The big move in the Main market seems a few months away, but signs are that the market should continue to move gradually higher ahead of the year-end.
This week’s focus: Lasco Financial generated $136 million in the September quarter profit compared with a loss of $16 million for the second quarter in the previous year. Profit after tax for the six months to September amounts to just $30 million, down from the corresponding period’s $75 million, and an improvement on the first-quarter loss of $106 million. Earnings per share ended at 10.7 cents for the quarter and 2.4 cents for the half-year. For the quarter, revenues fell 5.7 percent or $38 million from the 2019 September quarter to $617 million, due largely to the decline of revenues from loans that fell 34.5 percent or $152 million in the six months to September, compared with the previous year financial period.
Remittances grew 11 percent and added $50 million to revenues while Cambio operations contributed 10.8 percent or $34 million to increased revenues, the company’s Managing Director Jacinth Hall-Tracey, informed shareholders in a commentary accompanying the quarterly report.
Access Financial reported $62 million in profit after tax for the six-month to September, compared to $280 million for the same period in 2019. Higher revenue in the September quarter was offset by a $45 million increased loan loss provision, resulting in a slightly lower profit of $29 million versus $33 million in the first quarter. The next few quarters will be interesting to watch for future direction.
The top three stocks in Junior Market remain as they were this past week, with the potential to gain between 287 to 723 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. With Lasco Financial posting strong second-quarter results, they will likely drop out of the top three this coming week. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 161 to 238 percent, the top three Main Market stocks are now Berger Paints followed by JMMB Group, Radio Jamaica replacing Grace Kennedy in the third position last week.
The market’s targeted average PE ratio is 20, based on companies’ profits 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 the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.8 and the Junior Market 12.2, based on ICInsider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6 at just 49 percent to the Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.3 or 52 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 287 percent, and 149 percent for the JSE Main Market, based on 2020-21 earnings, indicates potentially greater gains in the Junior Market than the Main Market.
IC TOP 10 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 movement in and out of the lists for most weeks. 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.

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Cement Q3 profit jumps $1.15B

October 26, 2020 by

Profit at Caribbean Cement surged over by $1.15 billion to $1.23 billion percent in the September quarter, from a 32 percent jump in sales. For the nine months to September, profit jumped a strong 42 percent to $2.2 billion from $1.57 million in 2019 as revenues rose 12 percent to $15 billion.
Investors immediately reacted to the results by driving the stock up $8.04 or 17.5 percent to $54 on the Jamaica Stock Exchange.
The third quarter results blew past the June quarter, with revenues of $4.78 billion reflecting a modest increase over 2019 with the profit rising from $368 million to $521 million.
Operating profit surged 69 percent in the quarter, to $2.85 billion from $1.69 billion and rose 19.6 percent for the year to date, to $6.97 billion from $5.8 billion in 2019.  Direct operating cost, increased 8.5 percent from $2.7 billion to $2.93 billion and increased 5.8 percent for the year to date, to $8.1 billion from $7.7 billion in 2019.
Other operating and administrative expenses dropped 25 percent to $6.44 million in the quarter and fell slightly in the nine months period to $2.04 billion. Foreign exchange losses amounted to $266 million in the quarter and $923 million for the year to date, while finance cost declined in the quarter, to $173 million from $209 million in 2019 and from $677 million to $503 million for the nine months. The company provided $536 million for taxation for the quarter representing 30 percent of the profit and $1.27 billion for the nine months for 36 percent of profit.
Earnings per share came out at $1.44 for the quarter and $2.62 for the nine months. ICInsider.com is forecasting $3.50 per share for a PE of 15 times earnings. The amount could be beaten as there could be no foreign exchange losses in the December quarter and if sales keep close to the third quarter numbers while the provision for taxation could less than in the third quarter.
Gross cash flow provided by operating activities brought in $2.56 billion from which they paid $2.5 billion against loans, leaving $374 million in cash at the end of the period.
At the end of September, shareholders’ equity stood at $10.58 billion, up from $8.3 billion at the end of December last year. Borrowings are down to $7.7 billion from $12.8 billion at the close of September last year.
The results for the quarter shows the potential for the company to increase profits as cost are fairly fixed. The reverse is true as lower sales will adversely affect gross profit and drag profits lower. With the expansion in buildings in Jamaica and prospects for exports barring increased importation of cement into Jamaica, the future appears bright for the company. Added to the above is the rapid repayment of loans that will reduce interest cost and foreign exchange losses.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , ,

NCB out of IC TOP 10

October 25, 2020 by

The Main and Junior Markets closed the past week lower than the close of the previous week, with the Main market at a higher level than the third week of July, while the Junior Market continues at the lowest levels since the early summer months.
The Junior Market is currently signaling a big surge coming that will start in a few weeks as short term moving averages cross over longer-term ones to confirm a strong rally.
The price of Salada Foods sank to $20 on Friday, pushing NCB Financial out of the IC TOP 10 Main Market. As the markets continue to trade in a narrow band, there was no other movement in and out of the TOP 10.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks with the potential to gain between 282 to 764 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 151 to 227 percent, the top three Main Market stocks are Berger Paints, followed by JMMB Group and Grace Kennedy.
The local stock market’s targeted average PE ratio is 20 based on companies reporting full year’s results from now to the second quarter in 2021. The Junior and Main markets are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 16.1 and the Junior Market 12.2, based on ICInsider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 5.7 at just 47 percent to the Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.4 or 52 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 299 percent and 144 percent for the JSE Main Market, based on 2020-21 earnings, indicating potentially greater gains in the Junior Market than the Main Market.
IC TOP 10 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 for most weeks. 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.

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Caribbean Cream exits IC TOP 10

October 17, 2020 by

Investors responded strongly to Caribbean Cream more than doubling profit in the half year to August and a tripling of second quarter profit by pushing the stock up 9 percent on Friday, accounting for the second highest volume for the day. The rise in the stock price resulted in it moving out of IC TOP 10 Junior Market listing and replaced by Lumber Depot.
Lumber Depot returns to the top flight of stocks with earnings per share projected at 20 cents for the current fiscal year and the price just over $1. The Main Market is as you were last week, with no new change.
The Main Market closed the past week higher than the highest level since the beginning of July, except for September 30, another reminder that the market traditionally commences rallying in July each year and slowly builds towards the end of the year. The Junior Market closed the week just above the close of the previous week. That disguises the critical signal that is the market is currently sending. The jump in Caribbean Cream’s price this past week speaks eloquently to the underlying interest that is still in the market and displayed by the demand for Barita Investment stock, with investors’ demand pushing the price within a few dollars of the record high. The broader signal is the big surge that the Junior Market will experience in a few weeks as short term moving averages cross over longer-term ones to confirm a strong rally to come.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks with the potential to gain between 293 to 705 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 151 to 245 percent, the top three Main Market stocks are Berger Paints, followed by JMMB Group and Grace Kennedy.
The local stock market’s targeted average PE ratio is 20 based on companies’ profits reporting full year’s results from now to the second quarter in 2021. The Junior and Main markets are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.8 and the Junior Market 11.6, based on ICInsider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 5.7 at just 49 percent to the Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.5 or 54 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 298 percent and 144 percent for the JSE Main Market, based on 2020-21 earnings, indicating potentially greater gains in the Junior Market than the Main Market.
IC TOP 10  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 the selection process in and out of the lists for most weeks. 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.

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Profit more than doubles at Kremi

October 16, 2020 by

Profit after taxation at the IC Insider.com BUY RATED Caribbean Cream more than doubled, with a jump of 110 percent for the six months to August and 220 percent in the August quarter, to $74 million from $35 million in 2019 for the half-year and a rise from $14.7 million for the 2019 quarter to $47 million.
Operating revenues rose nine percent for the quarter, to $461 million from $422 million and six percent for the year to date, from $840 million in 2019 to $891 million. For the fiscal year to February, this year, revenues rose by 10 percent to $1.7 billion.
Improvement in profit margin resulted in gross profit rising faster than sales with 15 percent improvement in the first half of the year to $310 million versus $269 million in 2019 and 28 percent in the August quarter with gross profit of $171 from $133 million.
Selling, distribution and administrative expenses declined from $114 million in the 2019 quarter, to $111 million in 2020 and from $221 million in 2019, to $216 million in the six months to August. The decline in cost took place in spite of a sharp increase in depreciation charges in the current year, from $29 million to $59 million. Finance cost increased in the quarter to $6 million from $4 million in 2019 and from $10 million to $9 million for the six months period. Taxation doubled to $10.6 million for the half-year from $5 million in 2019 and moved from $2 million for the quarter to $6.7 million.
Historical results going back to the 2014 fiscal year shows steady annual growth in sales revenue but a more uneven increase in profits. The latter is partially due to the cost associated with expansion and the buying of market share that saw a less aggressive increase in selling prices for its products.
Earnings per share for the quarter came out at 12 cents and 20 cents for the six months.
Gross cash flow brought in $143 million, but growth in inventories, loan repayment offset by loan inflows and reduced payables pushed the cash funds to $152 million at the end of August, up from $58 million at the end of August 2019. With the increased profit for the year to date, shareholders’ equity now stands at $818 million, with borrowings at just $249 million. Net current assets ended the period at $191 million, including trade and other receivables of $63 million, while Current liabilities stood at $162 million.
The company paid 2.49 cents per share as the final dividend for the year ended February 29, 2020, on Friday, October 2. Net asset value is $2.16, with the stock selling at 2.3 times book value.
The results encouraged buying into the stock on Friday, with the price moving from $4.71 it last traded at on Thursday to a high of $5.25. IC Insider.com forecasts earnings of 60 cents per share for the current year that ends in February 2021 and 95 cents for 2022. The PE is currently 8.5 times the current year’s earnings based on the latest price of $5.15, the stock traded at on the Junior Market of the Jamaica Stock Exchange.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , , , , , ,

Caribbean Flavours highlight of IC TOP 10

October 12, 2020 by

For the past week, activity in the Jamaican stock market was mostly stable following the Barita Investments and Tropical Battery successful public offers. Buying interest increased for Caribbean Flavours and Jamaican Teas stocks, both with pending stock splits.

Caribbean Flavours a Derrimon’s subsidiary

This week’s focus: Caribbean Flavours (CFF), a former IC TOP 10 listed stock, ten for one stock split becomes effective Tuesday.  This stock is worth watching this week.  After the split, the company will have just under one billion shares issued. Many investors foolishly position themselves to buy stocks after the split at a higher value than before. It is almost a certainty that the price of CFF will move higher after Tuesday’s split. The company reported a 42 percent rise in second-quarter revenues and an increased profit of 25 percent, with profit for the half-year up by 23 percent. The forecast for earnings per share is $1.15 for 2020 and $1.75 in 2021. The PE ratio at the current price of $19.65 the stock traded at on the Junior Market on Friday is 17 times the 2020 earnings and 11 times 2021 earnings.
For a fifth consecutive week, there were no changes in the companies on the IC TOP 10 listings, but that could change with some results set for release during the week. The markets moved moderately higher to close at their highest levels since mid-August for the. The Main Market closed the past week higher than the previous one, but the Junior Market closed the week lower than the prior one.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 281 to 726 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 152 to 240 percent, the top three Main Market stocks are Berger Paints,  followed by JMMB Group and Carreras. Radio Jamaica is now down to the fifth spot with slightly lower earnings per share of 15 cents from 20 cents previously.
The local stock market’s targeted average PE ratio is 20 based on companies’ profits reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, indicating the potential gains. The JSE Main Market ended the week, with an overall PE of 15.4 and the Junior Market 11.3, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6.1 at just 54 percent to the overall Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.4 or 55 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 279 percent and 145 percent for the JSE Main Market, based on 2020-21 earnings, an indication of potentially greater gains in the Junior Market than in the Main Market.
IC TOP 10 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 the selection process in and out of the lists for most weeks. 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.

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Intriguing week for IC TOP 10

October 5, 2020 by

Activity in the Jamaican stock market for the past two weeks was mostly on Barita Investments following the successful public offer of new ordinary shares, Tropical Battery, with the listing after their IPO success. the prices of both rose above the public issue prices with Barita trading at a 52 weeks’ high of $98 and Tropical at $1.35.
For a fourth consecutive week, there were no changes in the companies on the IC TOP 10 listings. The markets moved moderately higher to close at their highest levels since mid-August for the junior Market. The Main Market closed at its highest level at the close of September since the beginning of July gave up all the gains on Wednesday and Tuesday to close back at mid-September level on Friday.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 297 to 764 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year profit to recover from reduced profit for the 2020 financial year. With expected gains of 204 to 228 percent, the top three Main Market stocks are Berger Paints followed by Radio Jamaica and JMMB Group.
This week’s focus: Jamaican Teas came in for increased buying during the past week after the company advised the Jamaica Stock Exchange that the board of directors will meet to determine a new record date for the sub-division of the Company’s shares, following the deferral at the Annual General meeting.  The stock traded at $4.30 on September 29 and closed at $4.83 on Wednesday, with 161,040 units changing hands, with the offer at $4.50. The volume ballooned to over one million units on Thursday, with the price hitting $5.55 during the day. The company completed the 2020 fiscal year at the end of September.
The market’s targeted average PE ratio is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.1 and the Junior Market 11.2, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6.1 at just 54 percent to the overall Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.2 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 283 percent, and 153 percent for the JSE Main Market, based on 2020-21 earnings, indicates potentially greater gains in the Junior Market than in the Main Market.
IC TOP 10 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 for most weeks. 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.

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Closed IPO & APO restore life to market

September 27, 2020 by

Oversubscribed public stock issues were the most pronounced development in the Jamaican stock market for the past two weeks. Barita Investments raised $13.5 billion from the public offer of new ordinary shares in the previous week and was joined by Tropical Battery, with their IPO that closed on the same day of opening, with a raise of $325 million. 

Barita eyeing acquisition.

Barita, a former IC Buy Rated stock capital raise, resulted in its share capital more than doubling from $10.88 billion to $24.4 billion and the overall equity capital moving to $28.74 billion. The stock price climbed to $77 at the close on Friday and provided investors in the APO with a nice 48 percent gain and more for smaller investors who bought at $49.
For a third consecutive week, there was no change in the companies on the IC TOP 10 listings, with the markets moving moderately higher partially helped by the rise in the price of Barita’s stock.
With the two public share issues out of the way, the Jamaica Stock Exchange market indices rose during the week with the JSE Main Market indices closing at the highest point since August 3 while the Junior Market was highest since August 26. The week’s movement reversed the negative effect the two issues had in diverting funds away from the market.
The top three stocks in each market saw no change in ranking for the top three Junior Market stocks, with the potential to gain between 295 to 709 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is the 2021 fiscal year results, projected to show recovery from the 2020 financial year final numbers. The top three Main Market stocks, with expected gains of 205 to 231 percent, are Radio Jamaica, followed by Berger Paints and JMMB Group.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior Market and the Main Market are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 14.8 and the Junior Market 11.2, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere six at just 54 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.3 or 56 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 280 percent, and 151 percent for the JSE Main Market, based on 2020-21 earnings, indicates potentially more significant gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on the possible increase 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 will result in movements of the selection in and out of the lists for most weeks. 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.

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Another quiet week for IC TOP 10

September 21, 2020 by

For a second consecutive week, there were no changes in the companies on the IC TOP 10 listings, with the markets going sideways and little or no significant price moving news.

Barita public stock offer pulled money away from other JSE stocks.

The Jamaica Stock Exchange market activity was negatively affected by funds diverted away from the as investors moved money into the successful Barita Investments issue of new shares. The Issue closed on Wednesday gone and was upsized to $13.5 billion, resulting in a more than doubling of the issued shares from $10.88 billion to $24.38 billion and the overall equity capital to $28.74 billion.
The past week that saw the local market trading in a narrow range, with the Junior Market closing slightly down for the week after ending the previous week at the highest point since August 28 and the Main Market had the highest weekly close since the end of August.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 292 to 695 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year results projected to show recovery from the 2020 financial year final numbers. The top three Main Market stocks, with expected gains of 204 to 228 percent, are Radio Jamaica, followed by Berger Paints, with the price rising 7 percent during the week and JMMB Group.
This week’s focus – Tropical Battery issue for 325 million ordinary shares at $1 each of with up to 187.5 million units reserved for priority applications, opens Tuesday, September 22, with the scheduled closing of September 30, subject to the right of the Company to close it earlier. With earnings per share around 7.7 cents, the stock is priced around a PE ratio of 13 times 2020 earnings, leaving little or no room for short term gains as it is priced 19 percent above the market average.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.3 and the Junior Market 11, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere six at just 55 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.2 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 280 percent, and 151 percent for the JSE Main Market, based on 2020-21 earnings, indicates potentially more significant gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on possible 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 will result in movements of the selection in and out of the lists for most weeks. 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.

Filed Under: Buy Rated Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , ,