Buy Rated — Page 8

Upped capital spend for Caribbean Producers

June 21, 2023 by IC Insider.com

Capital spend is set to expand at Caribbean Producers (CPJ) following approval of the Board, the company stated in a recent release with plans for “three major projects that will positively impact the growth and further development of the Company both locally and offshore” the release from the company stated.

Caribbean Producers

The plans include a U$1 million solar expansion project, with installation to commence in the first quarter of the 2024 financial year that starts in July, US$2.3 million modernization of the Meat Processing Plant, with work to commence in the first quarter of 2024, both projects will reduce operating cost. CPJ will be expanding its Operation in St. Lucia with a new store, with Operations to begin in the second quarter of the financial year 2024.
The proposed capital spend comes on the heels of a profitable nine months for the company recovering from fallout in revenues and profit during the covid-19 pandemic. For the three months to March, revenues rose 28 percent to US$35.7 million versus US$28 million in 2022 and climbed 24 percent to US$107 million for the year to March, over US$86.4 million for the similar period in 2022.
The March quarter saw cost of sales rising slightly faster than revenues, with an increase of 30 percent to US$25.3 million from $19.5 million, with a gross profit margin of 29 percent, down from 31.2 percent in 2022. For the nine months, it also rose faster than sales with an increase of 28 percent to US$75.3 million from US$58.8 million and resulted in a gross profit margin of 29.7 percent, down from 31.5 percent in 2022, negatively impacting profits.
According to management, “We expect growth in revenue and margins going forward will translate to improved company performance.”

Caribbean Producers

Profit before tax declined sharply for the March quarter by 65 percent from US$$1.8 million to US$636,974 after accounting for a one-time charge of US$1.45 million in the third quarter relating to GCT assessment, dragging profit down to a mere US$226,000 after tax, attributable to the company’s shareholders of and down 49 percent to US$3.6 million for the nine months compared to US$6.8 million earned in 2022. For the nine months, profit before tax declined 34 percent to US$5.2 million in the current year, from US$7.9 million for the similar period in 2022, but it declined a smaller 16 percent, excluding the one-time charge for GCT. Selling and administrative expenses rose sharply by 24.7 percent in the March quarter from US$5.2 million in 2022 to $6.5 million in what management stated was due to increased staffing to position for further growth, the increase negated the improvement in the gross profit. For the nine months, the cost in this category increased 33.6 percent to US$19.6 million from US$14.7 million in 2022. That was the area of significant cost increase that depressed profits for 2023. But profit before tax would have increased to US$2.8 million when the charge for GCT is excluded compared with US$2.6 million in March 2022 quarter and US$9 million versus US$10 million.

At the end of March, shareholders’ equity stood at US$26.7 million, up from US$22.4 million at the end of March 2022 and US$23.2 million at the end of the June 2022 fiscal year. The company continues to be heavily leveraged with borrowings of US$40.5 million, of which US$9.8 million is short term and due to be repaid within twelve months.
Current assets stood at US$62 million at the end of March versus US$62.5 million at the end of June 2022 and just US$25.3 million as of March 2022. Cash and equivalents were US$4.9 million, up from US$3.9 million at the end of the 2022 fiscal year, with receivables at $18 million, virtually flat with the fiscal year end. Still, inventories slipped to US$39 million from US$40 million at the end of the fiscal year but are up over March 2022 at $30 million.
Current liabilities stood at US$25.4 million at the end of March versus US$46.75 million at the end of June 2022 and US$25.3 million as of March 2022.
CPJ is the dominant company within the hospitality sector. The expected continued expansion in the hotel rooms should be fertile ground for continued growth in revenues and profitability over the next few years. The company is highly leveraged, which is a huge negative, especially when business declined, as it did during the height of the COVID epidemic, curtailing sales in 2021 and 2022.
The company reported 0.02 US cents in earnings per share for the March quarter compared to 0.14 cents in 2022 and 0.33 US cents for the half year to March 2023 versus 0.62 cents in the prior year. As indicated above, ongoing earnings per share are better than the numbers suggest. The US$1.5 million written off for general consumption tax assessment is not an ongoing expense. As such, it should be excluded from earnings in valuing the company’s shares to assess ongoing earnings capabilities better. In addition, the tourism trade did not return to normal capacity compared to 2019 until the start of 2023, as such, the first two quarters of this fiscal year are based on lower business levels than is the norm and the 2024 fiscal year should reflect a better outcome as a result.
IC insider.com forecast earnings of J$1.35 per share for the June 2023 fiscal year and J$2.50 in the next fiscal year, with the stock currently at $9.46 on the Main Market of the Jamaica Stock Exchange with a value of 7 times the current years’ earnings. Investors can expect a period of continuing growth in the share price over the next 12 months as a result of continued improvement in profitability and lower interest rates in the coming months.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Best performing stock market, Caribbean Producers, company results, CPJ, Daily Trading, Emerging markets, Jamaica Stock Exchange, Jamaican stocks, Trading Activity

SOS directors to consider splitting the stock

June 19, 2023 by IC Insider.com

The board of directors of Stationary & Office Supplies informed the Jamaica Stock Exchange that they will meet on Wednesday, June 21st to discuss and consider whether or not to recommend a stock split to the company’s shareholders.

SOS is likely to split stock in 2023.

According to the release, “the market value of the company’s stock has been on a consistent growth trajectory and the liquidity of the stock is also a significant consideration.”
At the last annual general meeting the CEO, Allan McDaniel stated that they were reviewing the matter of a stock split on an ongoing basis but that trading in the stock was fairly liquid as such there was no need to make the adjustment then.
ICInsider.com gathers that the $20 was likely to be the trigger point for a split. Last week the stock traded at $24 but pulled back to $20 where it is now trading, but if history is anything to go by, the price is likely to climb in Tuesday’s trading. With profits for the current year likely to hit nearly $2 per share and around $3 in 2024, that could push the price between $30 and $40 this year and $50 to $60 next year, a split in the order of 10 could place the price closer to where Junior Market investors could find the stock reasonably priced and encourage greater trading in it. A 10 to 1 split would lift the issued shares to just over 2.5 billion units which would be within a level that would facilitate a great deal of liquidity for a number of years, but the price could be back in the teens again in 2024. Even a 5 for 1 would result in an enhanced level of liquidity with just over 1.25 billion units in issue and push it to 16^th Junior Market company in terms of the number of issued shares and 6^th if a 10 to 1 split was to be approved. The prospects of profit jumping sharply in 2024, if achievable and seen by management as likely then a 10 to 1 split would seem to be the better option.
The split if approved by the directors, would require ratification by shareholders at a general meeting and that is likely to be at the company’s upcoming general meeting.
The next stock split could well come for Cargo Handlers, with thin trading currently with the price now in excess of $20. Dolphin Cove seems to be shaping for a possible spilt as well but that would be more likely down the road.

Filed Under: Buy Rated, Company News, Dividends Tagged With: Emerging markets, Jamaica Stock Exchange, Jetcon Corporation, junior market, Stationery and Office Supplies, Stock Split

Kremi heads ICTOP10 after gaining 22%

June 19, 2023 by IC Insider.com

The performance this past week in the Junior and the Main Market diverged significantly the Junior Market recorded gains in the week and put it back at early March levels this year while the main market declined further continuing negative performance since the beginning of June and is now back at August 2018 levels and is providing investors with a great opportunity to add some of these stocks to their early Christmas shopping at bargain prices.
The Junior Market has broken through the downward-sloping resistance line of the wedge. The Junior Market reclaimed the 3,800 handle last week and is close to retaking the 3,900 level shortly, with the market set for a big rally in the second half of the year a position supported by technical analysis of the market. The Main Market seems to be weighed down by concerns relating to inflation and interest rates, if so the reading is wrong as inflation is well under control and interest rates will start dropping before the year ends.
Against the background, the Junior Market recorded gains for six stocks during the week with iCreate jumping 26 percent to $1.20, Caribbean Cream moving up 22 percent to $3.89 and Edufocal putting on 6 percent to end the week at $1.89 hey worst performer was Iron Rock Insurance down 7 percent to $2 and General Accident fell 5 percent to $5, while One and One lost 3 percent to close the week at $1.04.
The Main Market had one price movement of note with Transjamaican rising 13 percent to close the week at $2.39. Declining are 138 Student Living down 11 percent to $4.60, Guardian Holdings, with a loss of 7 percent to $450.01 and Caribbean Producers lost 5 percent to end the week at $9.48.
Transjamaican moved out of the Main Market TOP10, with a gain of 27 percent since entering the TOP10 and 35 percent since it was added to Stocks to Watch at $1.77 in April, is replaced by Caribbean Cement, with projected earnings of $6.50 notwithstanding for the first quarter profit and in the Junior Market, Edufocal moved out while Everything Fresh returns after a brief absence to the TOP10 with the price having fallen to $1.50.
Transjamaican, although out of the top 10 has much more room to grow with the potential for an additional 200% increase in the stock price. A look at the order book for Transjamaican suggests that demand is likely to overwhelm supply over the next two to three weeks with a likely price target then of $3. Even then the potential dividend yield that could be 8 percent at that price could result in the price going higher.
Recent developments for some stocks – Lasco Distributors and Lasco Manufacturing increased dividends to 10 cents and 12 cents respectively, with both to be paid in July, while Stationery and Office Supplies hit a record high in the week at $24 but closed the week at $20 for a 17 percent gain for the year. The stock is now a prime candidate for a stock split. Earnings for Berger Paints were adjusted down to $1 per share for 2023.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.8, well below the market average of 13.1. The Main Market TOP10 is projected to have an average of 254 percent, to May 2024, based on 2023 forecasted earnings.
The 15 most highly valued Main Market stocks are priced at a PE of 15 to 98, with an average of 29 and 20 excluding the highest PE stocks, 23 for the top half and 18 excluding the stocks with the highest PEs.
The Junior Market Top 10 PE sits at 5.8 compared with the market at 11.1. There are 11 stocks representing 23 percent of the market, with PE from 15 to 42, averaging 21 that are well above the average of the market. The top half of the market has an average PE of 16, possibly the lowest fair value for Junior Market stocks currently. Junior Market is projected to rise by 270 percent to May 2024.
The divergence between the average PE ratio of the Main and Junior Markets and the overall market valuation is an important indicator of the level of likely gains for ICTOP10 stocks.
In the market generally, Investors continue to nibble away at a number of stocks and in the process gradually reducing the supply of several stocks that are attractively priced as the market moves toward the summer months, the start of the stock market year.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
ICTOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate and result in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.

Filed Under: Buy Rated Tagged With: 138 Student Living, AMG Packaging, Berger Paints, Caribbean Assurance Brokers, Caribbean Producers, Daily Trading, Emerging markets, General Accident, Guardian Holdings, Image Plus Consultants, Iron Rock Insurance, Jamaica Broilers, Jamaican Stock Exchange, Jamaican stocks, JMMB Group, junior market, Key Insurance, Lasco Distributors, NCB Financial, One on One, Scotia Group, Stocks to Watch, Sygnus Credit Investments, TOP 10 stocks, Trading Activity, Transjamaican, Tropical Battery

Profit climbs at Caribbean Assurance Brokers

June 14, 2023 by IC Insider.com

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Caribbean Assurance Brokers (CAB) is not one of the more popular Junior Market stocks, coming to the market just when the Covid-19 pandemic broke out in Jamaica, and got little post-IPO bounce and has never won the support of the wider market. The company reported record full year and 2023 first quarter profits, yet the stock continues to struggle although currently trading up from the price before the release of both results.
Operating Revenues rose 11 percent from $423 million to $469 million for the year ending December 2022, while Other Operating Income generated $37 million which was down 7 percent from $40 million in 2021, resulting in total income rising 7 percent to $506 million from $463 million in 2021. Profit for the year rose 32 percent to $75 million from $57 million in the prior year, with earnings per share of 30 cents up from 21 cents in 2021.
Selling Expenses were virtually flat for the year at $146 million compared with $145 million in 2021, Administrative Costs rose 10 percent to $281 million from $255, depreciation charge fell 10 per cent to $16 million and finance costs fell 32 percent to $4 from $6 million in 2022.
For the 2023 March quarter, revenues climbed 12 percent to $101.9 million from $90.6 million for the 2022 March quarter. Other Operating Income fell from $14 million to $12 million resulting in total revenues of $114 million rising 9 percent above $105 in 2021. The company earns the bulk of its income and profit in the September quarter. Profit jumped 840 percent to $17 million after tax from just $2 million in 2021, with earnings per share of 7 cents.
Selling Expenses fell by 30 percent to $25 million from $36 million in 2022, Administrative Cost rose 7 percent to $70 million from $66 million, depreciation charge rose 21 percent to $5 million from $4 million in 2021 and finance costs fell 45 percent to $593,176 from $1 million in 2021.

Caribbean Assurance Brokers selling at a PE of just 8 based on historical earnings & 5 times 2023.

Cash inflows from operations delivered $24 million, up from just $7 million in 2022, but cash funds climbed by $132 million by the end of March after spending $37 million on addition to fixed assets with a reduction in receivables and an increase in payables contributed $146 million in positive flows during the three months period.
At the end of March, shareholders’ equity stood at $480 million up from $390 million at the end of March 2022 and $463 million at the end of December 2022. The company continues to be lightly leveraged with borrowings of $59 million of which $53 million is short term and due to be repaid within twelve months.
Current assets stood at $536 million at the end of March versus $418 million in 2022. Cash and equivalent was $385 million up from $286 million at the end of March 2022, with receivables at $148 million, up from $127 million in 2022.
Current liabilities ended the 2023 quarter at $345 million at the end of March, up from $229 million at the end of March 2022.
ICInsider.com projects EPS of 50 cents for the current year, with the stock priced at $2.53 it last traded on the Junior Market and sits at the number 2 spot on ICInsider.com TOP10. The PE is a mere 5 times 2023 earnings and 8 times 2022 earnings and is one of the most undervalued stocks on the market currently.
The directors approved a modest dividend of 2.67 cents per share, well below the target stated in the prospectus of up to 25 percent of profits. The payment will be on October 26, with the ex-dividend date of September 14.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Caribbean Assurance Brokers, ICInsider BUY RATED, IPO, Jamaica Stock Exchange, junior market

Kremi heads ICTOP10 as Lasd gains 19%

June 11, 2023 by IC Insider.com

There was much activity in the Junior Market this past week, with the market index bouncing over the 3,800 mark for the first time since the middle of March, resulting in Caribbean Cream moving to $4.45 during the week but closed at $3.20 after traders pushed the stock down sharply on Friday, but Lasco Distributors shot to $3.31 and Lasco Manufacturing to $4.48 at the close with both moving out of the Junior Market ICTOP10.
Lasco Distributors and Lasco Manufacturing are still priced at less than 10 times 2023 fiscal year earnings when many others are priced over 15 times. Additionally, the company’s directors meet this week to consider dividends. Distributors is seemingly set to pay around 12 cents per share and Manufacturing 13 cents. With the dividend likely to be paid in July, the annual yield will equate to 42 percent and 35 percent, respectively, if the shares were acquired now. Replacing the two Lasco Companies are iCreate following a drop in the price to 95 cents and Edufocal closing at $1.78.
The Main Market TOP10 stocks remained the same as the week before, with the market struggling throughout the week, with four days of significant declines in the market index as selling pressure pushed prices down, resulting in just one stock, Transjamaican moving up in ICTOP10 with the largest gain of just 4 percent, with the stock hitting a record closing high of $2.11 on Friday. The chart shows it has the potential to gain another 200 percent. Berger Paints fell 9 percent to a 52 weeks’ low of $6.87, followed by JMMB Group with a loss of 4 percent to close at one year low of $28.75, Jamaica Broilers is down 3 percent to $35 and Scotia Group dipped 3 percent to $33.60 despite reporting increased profit for the first half of the 2023 fiscal year, with the second quarter almost doubling the similar quarter in 2022.
Lasco Distributors climbed 19 percent following an 11 percent rise last week to close at $3.31 and is up 59 percent from the 2023 low of $2.08 in April. Five stocks rose 6 percent: Caribbean Assurance Brokers, Dolphin Cove, General Accident, Consolidated Bakeries and Lasco Manufacturing, while One on One slipped 3 percent at the end of the week to be the biggest loser.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.7, well below the market average of 13.2. The Main Market TOP10 is projected to have an average of 265 percent, to May 2024, based on 2023 forecasted earnings.
The 15 most highly valued Main Market stocks are priced at a PE of 15 to 98, with an average of 30 and 20 excluding the highest PE stocks and 18 for the top half excluding the stocks with the highest valuation.
The Junior Market Top 10 PE sits at 5.3 compared with the market at 10.4. There are 10 stocks representing 21 percent of the market, with PEs from 15 to 25, averaging 19 are well above the market’s average. The top half of the market has an average PE of 15, possibly the lowest fair value for Junior Market stocks currently. Junior Market is projected to rise by 283 percent to May 2024.
The differences between the average PE ratio of the Main and Junior Markets and the overall market valuation are important indicators of the likely gains for ICTOP10 stocks.
ICTOP10 focuses on likely yearly winners. Accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks will likely deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Filed Under: Buy Rated Tagged With: 138 Student Living, AMG Packaging, Berger Paints, Caribbean Assurance Brokers, Caribbean Producers, Daily Trading, Emerging markets, General Accident, Guardian Holdings, Image Plus Consultants, Iron Rock Insurance, Jamaica Broilers, Jamaican Stock Exchange, Jamaican stocks, JMMB Group, junior market, Key Insurance, Lasco Distributors, Lasco Manufacturing, NCB Financial, One on One, Scotia Group, Stocks to Watch, Sygnus Credit Investments, TOP 10 stocks, Trading Activity, Transjamaican, Tropical Battery

Q2 profit nearly doubles for Scotia

June 10, 2023 by IC Insider.com

Scotia Group head quarters

A $2.5 billion jump in net interest income and a billion dollar increase in fees and foreign exchange gains pushed profit before tax at Scotiabank Jamaica to $6.1 billion from $3.4 billion for the April 2022 quarter and $4.2 billion after tax for April 2023 second quarter from $2.4 billion for the same period in 2022 that resulted in earnings per share of $1.35 up from 77 cents in the April 22 quarter and $2.45 for the half year with an indication that full year earnings will be in the order of $5.30 per share.
Net interest income came in at $9.4 billion for the current year’s quarter, up from $6.9 billion in 2022, while expected credit losses were flat at just over $665 million in the current quarter.
Net fees, foreign exchange trading, and other income were $3.9 billion for the 2023 quarter, up 30 percent from $3 billion in the previous year. For the year to date, net interest income came in at $18.5 billion versus $13.3 billion in the year before. Expected credit losses were flat at roughly $1.2 billion, while other income came in at $8.3 billion versus $7 billion in 2022. Expenses were well contained but increased by 14 percent to $6.6 billion in the April quarter from $5.8 billion in 2022, with the year to date rising just under 11 percent to $14.4 billion versus $13 billion in the prior year.
The group’s segments are having a mixed year, with half year numbers showing Treasury generating external revenues of $5.8 billion and profit of just over $1 billion compared with revenues of just over $3 billion in the previous year’s half year but profit before tax was flat at just over $1 billion in each. Retail banking saw a big jump in segment profits of $1.9 billion compared to $500 million in the 2022 half year, from revenues of $9.9 billion compared to $9 billion in 2022.

Audrey Tugwell Henry Scotia group’s CEO

Corporate and commercial activities generated $7.3 billion in revenues and profit of $5.6 billion compared with revenues of $5.1 billion in 2022 with profit before tax of $2.8 billion, while Investment banking had revenues of $1.6 billion and a profit before tax of $800 million compared to revenues of $1.5 billion in the 2022 half year and profit $650 million. Insurance services generated income of $2.5 billion in 2023 with profit before tax of $2.15 billion compared to revenues of $1.17 billion in 2022 and profits of $789 million.
Significantly, loans grew a solid 20 percent from $207 billion at the end of the April 22 quarter to $249 billion at the end of April this year, while customers’ deposits grew 10 percent from $400 billion to $440 billion.
Despite growth in earnings, Shareholders’ equity contracted from $113 billion as of April 2022 to $109 billion. A dividend of 35 cents per share was declared for payment in July.
The stock trades at $33.60 on the Main Market of the Jamaica Stock Exchange on Friday at a PE of just 7.
Going forward, Scotia is in a great position to benefit from the resurgence in the Jamaican economy with expectations of continuing growth to take place going forward as the government continues to reduce the debt to GDP ratio thus freeing significant resources to facilitate long term spending on infrastructure development within the country provide a significant leg for continued growth in the Jamaican economy.

Filed Under: Buy Rated, Company News, Company Results

Profit returns for Caribbean Cream

June 4, 2023 by IC Insider.com

Following a torrid 2022 fiscal year, with a loss before taxation of $13.7 million, Caribbean Cream delivered a much better performance in the fiscal year to February this year, with pretax profit of $41.8 million and $27 million after accounting for $14.7 million for taxes, up from a $9 million loss in 2022 in a year that finance cost almost doubled to $66 million from $34 million in 2022, from increased borrowings.
Sale revenues for the just completed year rose 20 percent to $2.5 billion from $2.1 billion in 2022. In the final quarter, revenues climbed 22.5 percent to $674 million from $553 million in 2022 and increased 17 percent over the $576 million in the November 2022 quarter. In contrast, revenues for the 2022 February quarter were 10 percent more than the $501 million generated in the November 2021 quarter. All in all, the 2023 fiscal year performance was well ahead of the year to February 2022, even as the year started with just $1.3 million in profit with cost of sales at 73.2 percent with the second quarter being slightly better with cost of sales down to 70.7 percent and profit improving to $7.2 million as both volume improvement and price adjustment to the output chipped in to help improve the bottom line.
Kremi, as the company is known, has had a checkered history with Profit meandering from 2015 to 2023. (See Chart)
Since 2020 the company has faced increased input costs that squeezed profit margin. In the latest fiscal year, cost of sales dropped to 64 percent in the final quarter compared to 69 percent for the year and 71 percent for the nine months to November. The jump in revenues in the fourth quarter over the November quarter would have helped to improve the margin, but it appears that raw material costs fell compared with the earlier months of the fiscal year. In 2022 cost of sales was 71.6 percent and 66.6 percent in 2021.
Cost of sales rose 16 percent, slower than sales in 2023, to $1.73 billion from $1.49 billion in 2022, with gross profit rising faster than revenues, a positive development with an increase of 31 percent to $593 million from $775 million in 2022. The cost of raw materials used in sales rose 16 percent to $1.17 billion, compared with a 33 percent rise in fiscal year 2022 over 2021. Milk solids, one of the primary raw materials, about 70 percent that is used in producing ice cream moved from an average of US$3,355 per ton in 2018 to US$5,067 in 2022 and is now $4,676 in 2023, down 9 percent. In 2022 the cost rose by 29 percent, these movements, coupled with exchange rate changes for the Jamaican dollar, would have pushed up the company’s production cost; also affecting cost would be a 7 percent movement in the exchange rate between the Jamaica dollar and the US dollar. If continued, falling commodity prices in 2023 will lower the cost for them and help improve profits. Also of note is that the price of crude oil is now 38 percent less than it was in 2023 at the start of June and that feeds directly into utility cost incurred in production, which was $166 million, 16 percent higher than 2022 and 19 percent more in Administration with $99 million versus $83 million in 2022.
Administrative expenses rose 17 percent to $598 million from $512 the previous year. Marketing and sales expenses increased by 18 percent to $72 million from $61 million in 2022 and depreciation came in at $100 million, marginally down from $102 million in 2022. Some $930 million is tied up in construction in progress at the end of the fiscal year and will result in the charge rising appreciably in the 2024 fiscal year when those assets are transferred to fixed assets but will reduce the actual taxation payable as capital allowances in the first year, will reduce the actual tax liability that will be payable. Finance cost jumped 91 percent to $66 million from $34.5 million in 2022, but a significant portion of the loans have interest rates capped and will not result in increases in the current period.
Gross cash flow generated $195 million from operating activities, up from just $53 million in 2022. Funds internally generated were augmented by loan inflows of $353 million and funds at the start of the year amounting to $145 million, which helped to fund additions to fixed assets of $541 million.
The total Current assets ended the year at $535 million inclusive of trade and other receivables of $157 million, cash and bank balances of $67 million, down from $146 million in 2022. Current liabilities ended at $389 million, up from $313 million and net current assets ended the period at $167 million, down from $212 million in 2022.
At the end of December, shareholders’ equity stood at $826 million, with long term borrowings at $920 million, up from $603 million in 2022 and short term at $107 million against $67 million in 2022. The increased borrowing helped to fund additions to fixed assets amounting to $542 million during the year, of which $490 million is construction in progress.
Earnings per share came out at just 7 cents for the year, with a steep PE of 45.7, but earnings for the current year are expected to jump well over that for 2023. IC Insider.com forecasts a considerable increase of 90 cents per share for the fiscal year ending February 2024, with a PE of 3.6 times the current year’s earnings based on the price of $3.20 the stock traded at on the Jamaica Stock Exchange Junior Market and a net asset of $2.18.
The company did not pay a dividend in 2022 but 6.94 cents in 2021.
The company may have faltered over the last two years, but it has shown in the past that it can recover. Additionally, it is not going away anytime soon. It will recover lost ground as they invest in its manufacturing operations to generate cost reductions, greater efficiency, and improved profit. The first quarter results due by July should show the first signs of this robustness as the company reports a significant profit improvement over the 2022 first quarter and a better than the 2023 February quarter.
What should investors do? Investors should buy the stock that is selling well below potential as investors reacted negatively to poor results reported in 2022 before the release of the 2023 results.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Caribbean Cream, Emerging markets, ICInsider.com BUY RATED, Jamaica Stock Exchange, junior market, Kremi

Kremi tops ICTOP10 Lasco Manufacturing in

June 3, 2023 by IC Insider.com

Iron Rock Insurance ended the past week up 14 percent to $2.25 and Lasco Distributors climbed 11 percent to $2.77 after both jumped 34 percent and 21 percent, respectively, earlier in the week, with two new stocks entering the Junior Market ICTOP10. At the same time, the Main Market TOP10 delivered moderate up and down movements.
The Lasco Distributors price movement follows release of full year results with earnings of 38.5 cents per share, with ICInsider.com projecting earnings of 55 cents for the fiscal year ending March 2024, leaving much room for solid upside price movement in the months ahead.
Lasco Manufacturing (LasM) and Caribbean Cream (Kremi) released improved full year results over those for 2022. Importantly, ICInsider.com forecast for the 2024 fiscal year is 70 cents per share for LasM and 90 cents for Kremi, with both entering the TOP10 this week, with one at the top and one at the bottom. Iron Rock Insurance and Edufocal fell from the Junior Market TOP10 to make way for the two stocks.

The stock rising in the ICTOP10 Junior Market, apart from those mentioned in the opening paragraph, is Consolidated Bakeries, with an increase of 4 percent to $2.27. At the same time, Caribbean Assurance Brokers, iCreate and One on One dipped 4 percent to $2.40, $1.26 and $1.10 respectively.
The price of Main Market listed Caribbean Producers, popped 5 percent in closing at $10.06, Key Insurance fell 11 percent to $2.80 and 138 Student Living lost 8 percent in value to close at $5.15.
At the end of the week, the average PE for the JSE Main Market TOP10 is 5.9, well below the market average of 13.5. The Main Market TOP10 is projected to have an average of 259 percent, to May 2024, based on 2023 forecasted earnings.
The 15 most highly valued Main Market stocks are priced at a PE of 15 to 110, with an average of 28 and 19 excluding the highest PE stocks and 18 for the top half excluding the stocks with the highest valuation.
The Junior Market Top 10 PE sits at 5.3 compared with the market at 10.5. There are 10 stocks representing 21 percent of the market, with PEs from 15 to 24, averaging 19 are well above the market’s average. The top half of the market has an average PE of 15, possibly the lowest fair value for Junior Market stocks currently. Junior Market is projected to rise by 295 percent to May 2024.

Lasco’s ICool drinks.

The differences between the average PE ratio of the Main and Junior Markets and the overall market valuation are important indicators of the level of likely gains for ICTOP10 stocks.
In the market generally, Investors continue to nibble away at a number of stocks and, in the process, gradually reduce the supply of several stocks that are attractively priced as the market moves toward the summer months, the start of the stock market year.
A look behind the supply chain shows an ever decreasing number of stocks on offer. The list includes Caribbean Assurance Brokers with strong buying interest between $1.88 and $2.40, but limited selling above $2.50, Caribbean Cement, Caribbean Producers (CPJ), Fontana, Dolphin Cove, Honey Bun, Main Event, Massey Holdings, Seprod, Transjamaican and Wisynco have started to look positive. Supplies of some stocks are being quietly sucked out of the market, setting the stage for a sustained rally sometime down the road. ICTOP10 focuses on likely yearly winners. Accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Filed Under: Buy Rated, Stock Market, Stocks to watch Tagged With: 138 Student Living, Berger Paints, Caribbean Assurance Brokers, Caribbean Producers, Daily Trading, Emerging markets, General Accident, Guardian Holdings, Image Plus Consultants, Iron Rock Insurance, Jamaica Broilers, Jamaican Stock Exchange, Jamaican stocks, JMMB Group, junior market, Key Insurance, Lasco Distributors, Lasco Manufacturing, One on One, Scotia Group, Stocks to Watch, Sygnus Credit Investments, TOP 10 stocks, Trading Activity, Transjamaican Highway, Tropical Battery

Insurance companies head ICTOP10

May 29, 2023 by IC Insider.com

The JSE Main Market gained more than 7,000 points in the past week, but the Junior Market just closed a few points north of the prior week’s close, resulting in sizable changes in both markets’ ICTOP10 as insurance companies head TOP10.
Elsewhere the only other news of note was the passing of the Chairman and majority owner of the Lasco companies, the addition of two new directors at ISP Finance and the Bank of Jamaica issue of $35 billion in 28 days CDS with investors offering to buy just $35.24 billion, BOJ took up less than the amount offered with $34.45 billion being sterilized the amount offered and moved the total amount of CDs outstanding to a record $111.45 billion up from $109 billion the week before. The average interest rate climbed back above 8 to 8.24 percent.
Investors are nibbling at stocks that seem to be the market signal being sent, with gains in some of the ICTOP10 listings. Notable amongst them are Caribbean Assurance Brokers with solid buying interest between $1.88 and $2.09 but limited selling above $2.50, Caribbean Producers (CPJ), Dolphin Cove Massey Holdings, Transjamaican, and Wisynco have started to look positive. Supplies of some stocks are being quietly sucked out of the market and setting the stage for a sustained rally sometime down the road. Investors should look to July as an important month that could trigger a change in mood as investors anticipate second quarter results.
Action in the markets this past week resulted in four ICTOP10 Junior Market stocks recording significant losses of 6 to 26 percent, with only 2 with 4 percent gains. Everything Fresh dropped out of the TOP10 and iCreate returns after a brief absence. Main Market stocks were mixed, with one noted loss and two gains of note.
Stocks rising in the ICTOP10 Junior Market are Everything Fresh and One on One, which increased 4 percent to $$1.72 and $1.15, respectively. Iron Rock Insurance dropped 26 percent to $1.85, Consolidated Bakeries shed 10 percent to $2.19, while Dolphin Cove and Lasco Distributors lost 6 percent to end at $15.50 and $2.50, respectively.
The price of Main Market listed Transjamaican rose 6 percent to close at $2.02, Caribbean Producers popped 5 percent in closing at $9.54 and Key Insurance fell 14 percent to $3.15.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.9, well below the market average of 13.5. The Main Market TOP10 is projected to have an average of 252 per cent, by May 2024, based on 2023 forecasted earnings.
The 15 most highly valued Main Market stocks are priced at a PE of 15 to 93, with an average of 29 and 19 excluding the highest PE stocks and 19 for the top half excluding the stocks with the highest valuation.
The Junior Market Top 10 PE sits at 5.8 compared with the market at 10.9. There are 11 stocks representing 23 percent of the market, with PEs from 15 to 25, averaging 19, which is well above the market’s average. The top half of the market has an average PE of 15, possibly the lowest fair value for Junior Market stocks currently. Junior Market is projected to rise by 265 percent to May 2024.
The differences between the average PE ratio of the Main and Junior Markets and the overall market valuation are important indicators of the likely gains for ICTOP10 stocks.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market, but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks will likely deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.

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

Filed Under: Buy Rated Tagged With: 138 Student Living, Berger Paints, Caribbean Assurance Brokers, Caribbean Producers, Daily Trading, Emerging markets, General Accident, Guardian Holdings, Image Plus Consultants, Iron Rock Insurance, Jamaica Broilers, Jamaican Stock Exchange, Jamaican stocks, JMMB Group, junior market, Key Insurance, Lasco Distributors, One on One, Paramount Trading, Scotia Group, Stocks to Watch, Sygnus Credit Investments, TOP 10 stocks, Trading Activity, Transjamaican, Tropical Battery

CAB back atop ICTOP10

May 22, 2023 by IC Insider.com

The ICTOP10 top performing stock for the previous week – Caribbean Assurance Brokers (CAB), was the biggest loser last week with a 15 percent decline and returns to the top of the listing as some selling came into the market, with most buyers remaining at the $2 or lower level with a pullback in prices of more Junior Market TOP10 stocks than those that rose.
Earning season delivered solid profit gains for several companies, but that did little to move prices substantially upwards, even as interest rates are softening. A few exceptions are CAB, Dolphin Cove, Consolidated Bakeries, Everything Fresh and earlier Image Plus and Tansjamaican Highway, which enjoyed increased buying interest that sent higher prices. Things have since cooled, as is the norm after most results were released in May, as investors await the critical second quarter number in late July into August before pulling the trigger.
Action in the markets this past week resulted in the ICTOP10 Junior Market stocks recording mostly losses with only a few winners. Main Market stocks recorded mostly wins, with few losses. Dolla Financial dropped out of the TOP10 with Everything Fresh moving back in.
Consolidated Bakeries jumped 20 percent to $2.44, followed by Iron Rock Insurance, which increased 9 percent to $2.50. Dolphin Cove climbed 8 percent to $16.44, helped by robust first quarter results, following an 88 percent increase in revenue to US$4.9 million over the first quarter in 2022, with profit after tax rising 97 percent to US$1.57 million from US$796,000 in 2022. Following CAB, the leading decliner, Image Plus, fell 7 percent to $2.04, while Edufocal and Dolla Financial lost 4 percent to end at $1.87 and $2.71, respectively.
The price of Main Market listed Sygnus Credit Investments gained 13 percent to finish at $13.04 and was followed by Key Insurance, up 7 percent to $3.65 and 138 Student Living with an increase of 5 percent to $5.67, while Caribbean Producers dropped 7 percent in closing at $9.05.
Interest rates on BOJ CDs and Treasury bills have declined in recent weeks below 8 percent, but the Bank of Jamaica held the overnight rate at 7 percent as they cite concerns about the implication of increased minimum wages and the usual agricultural price hikes in the summer months amongst other issues that could derail the reduced inflation rates in recent months. Although many stocks are severely undervalued, a real market bounce may be some time off and may not happen until BOJ starts reducing rates later in the year.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.9, well below the market average of 13.8. The Main Market TOP10 is projected to have an average of 250 percent, to May 2024, based on 2023 forecasted earnings.
The 15 highest valued Main Market stocks are priced at a PE of 15 to 115, with an average of 28 and 18 excluding the highest PE stocks and 18 for the top half excluding the stocks with the highest valuation.
The Junior Market Top 10 PE sits at 5.8 compared with the market at 10.8 there are ten stocks or 21 percent of the market, with PEs from 15 to 24, averaging 19, well above the average of the market. The top half of the market has an average PE of 15, possibly the lowest fair value for Junior Market stocks currently. Junior Market is projected to rise by 250 percent to May 2024.
The differences between the average PE ratio of the Main and Junior Markets and the overall market valuation are important indicators of the likely gains for ICTOP10 stocks.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market, but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks will likely deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.