Within less than a month of the release of Desnoes and Geddes full year results, to June, the company is reporting another purchase of shares by a director. The latest, is 3rd such inside purchase to have taken place, since the June results were released.
The latest acquisition is 507,650 shares on September 23. This comes on the heels of Desnoes and Geddes reporting strong full year results, with the promise of higher earnings, in the new fiscal year. The company previously reported the purchase 250,000 shares by a Director, on August 29, 2014 and 100,000 units, on September 1.
More insider buying of D&G shares
Profit on the rise for Dolphin Cove
The fast growing Jamaican north coast entertainment company Dolphin Cove, is reporting increased profits for the six months ended June, this year. Profit rose 30 percent to $287 million over the $221 million in the 2013 comparative period, according to the unaudited six months financial report.
For the June quarter, Dolphin made profit that is 34 percent ahead of that of 2013 to hit $139 million up from $103 million last year.
“This rise in profits is mainly as a result of the growth in revenues and supported by cost containment measures which resulted in operating expenses increasing by a lower percentage than the growth in sales. The decision to increase our investments in sales and marketing in the June 2014 quarter produced the desired results, as sales increased by 17 percent above that of 2013 and also surpassed the 11 percent increase in revenue which was experienced in the first quarter,” Manager said in a release of the results to shareholders.
Total revenues climbed 15 percent to $923.4 million for the half year, from $800 million and $471 million versus $400 million in June 2013 quarter, for an 18 percent increase.
The company would have benefited from the fall in the value of the local currency as its income is denominated in United States dollars, but much of its cost are in Jamaican dollars. The end may be in sight for a sharp fall of the local currency, even as the country in now in the period of low inflows and high demand for US dollars. So far the inflows have been buoyant, meeting demand up to the end of September with a stable rate so far. The company’s income is substantially reliant on developments in the tourism sector as it get the bulk of its income from overseas visitors for meals and the attraction of dolphins, sharks and stingrays.
IC Insider’s forecast for earnings, is $1.20 per share, for the current year ending December. In 2013 the company earned 82 cents. Based on the rise in profit, the company pushed dividends up by 50 percent for this year to date and works out at a yield of 8 percent on the stock price of $8.
Equity stood at $1.57 billion at the end of June with borrowed funds at only $355 million.
Seprod considering a dividend
Seprod advised that at a meeting of the board to be held on October 6, 2014, a dividend payment will be considered.
Seprod paid a dividend of 55 cents per share on July 4, this year. Last year a dividend of 30 cents per share was paid on November 15 and 53 cents per share on July 8.
Seprod reported a hike in profit of 14 percent for the six months to June this year, slower than the 34 percent increase in the first quarter. The company posted profit of $698 million for the half year, up from $614 million in 2013.
50% hike in dividends at Dolphin Cove
Dolphin Cove hiked the amount being paid out as dividends this year, continuing to pay out 50 percent more than they did in 2013.
The latest dividend to be paid will be on Wednesday October 22, 2014, has moved from 10 cents last year, to 15 cents per share to shareholders on record at October 3, 2014. The stock trades Ex-dividend on October 1.
Previously, Dolphin Cove earlier this year, pushed up the dividend payment by 50 percent when they paid interim dividends of 15 cents per share, on June 30 and on April 9 this year. In 2013, 10 cents per share was paid on December 4, September 16, on June 6 and March 28.
The increase comes against the back ground of a continued rise in profit for the entertainment company, with profits for the six months ended June 2014, increasing 30 percent to $287 million, over the $221 million in the 2013 comparative period.
Kingston Wharves dominates
Kingston Wharves $3 billion trade dominated activity on the Jamaica Stock Exchange, in Wednesday’s trading. 466 million units of the stock, was sold to Jamaica Producers and an overseas entity in the shipping industry. National Commercial Bank was the main seller. The stock traded at $6.50 up from $5.01 on Tuesday but it had a bid of $5.75 which allowed the trade to take place at 29.75 percent above the closing price on Tuesday.
Trading activity resulted in the prices of 10 stocks rising and 5 declining as only 20 securities changed hands, resulting in 470,310,461 units trading, valued at $3,066,292,531, in all the market segments.
Main Market| The JSE Market Index gained 631.80 points to 72,064.01 and the JSE All Jamaican Composite index rose 706.45 points to close at 79,288.84.
Junior Market| The enjoyed trading in 324,780 units valued at JSE $353,366. The Junior Market Index fell 2.40 points to close at 649.56 as just 5 stocks traded with 2 advancing and 2 declining.
Insider sells 1m JMMB stock
Jamaica Money Market Brokers advised the Jamaica Stock Exchange that a connected party sold 1,000,000 of the Group’s shares, on September 18, 2014.
The sale was executed through Scotia Investments which seems strange, as onlookers would consider that a connected party to group would have used the JMMB brokerage house instead of a non-related entity.
Why Dividend matters
Investing in stocks is not only for those big capital gains that create excitement for many investors. Dividends are an important part of the investment returns, but are often underestimated. They carry additional message, than the pure pay out of profits to shareholders. Dividends provide cash flow while one waits on a stock to increase in value. Stock prices move up and down over time.
Because of such movements and that sometimes, good companies have bad patches, when profits fail to grow much and can hold the stock price down for long periods, investor can just collect dividends while waiting on the return to stock price growth. Look at the example quoted below, while the stock price gained nearly 700 percent, since the end of 1993, the dividends have grown by over 2,000 percent in the same period. The exciting thing is that investors got paid every year since 1993. The amount accumulated over that time is large, amounting to $23.58 cents per share or more than the increase in the stock price.
Best Signal| The level of payment or future payments, may well be the best signal that investors will get from within a company that the stock price is set for upward movement. Dividend yields on stocks usually fall well below the interest paid on government paper. History dictates that yields usually return to their norm over time. We can use the level of present or future dividends as a predictor of stock prices. At the heights of the stock market in Jamaica, dividends yields fell to round two percent on average. Yields currently are 7% for many stocks, in the case of
Carreras well over 10 percent, suggesting huge gains ahead for stocks, not taking the sharp fall in interest rates, locally into consideration from high teens.
High priced stocks| New investors should not be afraid of what some persons will regard as expensive or high priced stocks, if they have the qualities to rise in value above lower priced stocks. The absolute price of a stock is not determinant, if an investment in it is warranted or not.
History confirms that a good dividend policy will provide an attractive rate of return on original investment over time. A very good example is Scotia Group. In 1993 they paid out $220 million or fifteen cents per share but paid out $4.98 billion or $1.60 as dividends, this fiscal year. The stock price at the end of 1993 was just over $3 and is at $20 now and yet the stock is undervalued presently. Those returns happened during one of the most turbulent periods, in the local capital market.
Useful indicators| Some useful indicators to follow are, financial results, one wants to see a nicely rising trajectory of earnings. Take the chart of Access earnings and revenues this is a excellent example of the picture an investor ought to be looking for. It is not surprising that the stock price of Access has done so well since it was listed.
Information such as major expansion, could mean increased sales and with that profits ahead. Developments within the economy, lower interest rates are major factors that influence the movement of stock prices. An increased dividend payment is another good indicator that things will be better going forward, as companies are unlikely to increase dividends, if profits are not growing.
KLE Group director sells out
Two directors KLE Group sold 8,100,000 and 5,896,500 stock units of the company, on September 9, 2014, at $1 per share, bringing to three the number of directors who sold off large portion of their holding in the floundering group, within two months. One former director, Craig Powell, dumped part of his holdings, on Friday July 11, on the Jamaica Stock Exchange. Stocks and Securities acting as brokers on behalf of the seller and buyer, executed Powell’s trade at 90 cents each for the 7,181, 043 units, in July.
Powell is not the only director that has sold shares in the company. According to a listing of holdings in March, Kevin S. Bourke a director, held 10,435,250 shares, the same as of the end of 2013 and so did the CEO Gary C. Matalon with 9,295,250 units held directly, in his name, but with a total of 16,073,628 shares that he is connected with. Zuar A. Jarrett had 10,178,500 units at the end of 2013, this was down to 6,896,500 in March. Stephen Orlando Shirley had 10,111,500 units at the end of December, but 6,761,500 in March and David A. Shirley had 6,227,750 without any change in holdings, The sale are unlikely to be coming from the lesser amounts as they are no disclosure that directors bought more shares since March to have driven up their holdings. There are only two directors with enough shares to match the recent sales of 8.1 million units, either Matalon or most likely, Kevin S. Bourke. The 5,896,500 units sold looks very similar to Zuar A. Jarrett holding less 1 million units. On the same day the directors sold the shares recently, 1,849,709 shares was also sold. The latter amount seems part of JCSD Trustee Services – Sigma Optima shares which totalled 2,849,709 units in March. The sales took place against the back ground of the company reporting one of the better quarterly results since listing.
A senior manager sold Scotia Group advised of the sale of 15,960 shares on September 8, 2014 from shares held under the Employee Share Ownership Plan.
A senior manager sold 40,000 National Commercial Bank shares during the period August 18 – 26, 2014, the company reported.