Compelling case to watch Fontana & Wisynco

Fontana Waterloo Road branch now nearing completion.

Two compelling buys this week that investors should be watching over the next few weeks, are Fontana in the Junior Market and Wisynco in the main market of Jamaica Stock Exchange.
Last week, the results of a few companies were released, but only the results of Wisynco, had the potency to move the stock price, without much delay. More companies will release quarterly reports this week and they are worth watching.
Wisynco reported strong half-year results to December and encountered good buying interest on Friday with nearly 2.7 million shares trading, with little price movement. Trading on Friday may have removed quite a bit of supply to help pave the way for an inevitable price rise at some point in time. The company is yet to reap the full benefit from the new production lines they installed last year and effective providing room for greater profit margin. In addition, they added sugar distribution to the product line up starting in January this year. The company is ripe to add more products for distribution could well add new brands to the lineup that will boost revenues and profit if that happens.  At current price of $10.40 and with a strong increase 36 percent in profits for the December quarter, investors with limited inventory of the stock would be unwise not to add it to their portfolios.

Wisynco could enjoy much increased revenues going forward as new products as added to the line up.

The recent quarterly report of AMG Packaging showed a big improvement of 68 percent in profit to $16.1 million, resulted in garnering increased buying interest around the $2.50 level. The price could move higher with sellers trying to get out around $2.70 level.
Elite Diagnostic rose in price this past week with increased buying interest and may go higher in the coming weeks as the quarterly results for December should show a big improvement over the $1.8 million profit reported in the first quarter to September and point to a much brighter future for this expanding entity.
PanJam Investment has limited supply of the stock offered on the market currently. At the close on Friday, just 79,000 units were shown on the JSE trading platform for sale compared, to 781,000 on the buy side. The lowest offer was 51,000 units at $80. It will be interesting to see what will happen with the price during the week.
Demand for Fontana shares is gradually eating away at supply of the stock with the price closing at $3.60, on Friday. The bid closed at $3.60 on Friday and the price could move higher during the week.  With IC projected earnings for the current year at 50 cents per share and the opening of its latest branch this year, the stock has lots of potential gains ahead of it.
General Accident enjoyed lower demand in the past week with the price slipping from $4 to $3.90. The stock is a big value play with the 2018 results likely to come out in the region of 45 cents per share and 2019 even higher and provide solid incentive for the buyers to pick up the stock. Interim results for the full year, are expected to be released this week. Jamaica Stock Exchange shares hit a new high of $14, during the past week, with increasing interest shown in the stock. Exposed supply is currently not high, with expected continued buoyancy in

Seprod shares now trades at $34.85 each.

the market and a big increase in new listings this year, investors seem more aggressive to buy into what should be another year of increased profit for the company. Seprod price moved up to $34.85 with increased demand for the shares continuing against the background of declining supply. The price seems poised to move even higher in the coming weeks as the stock remains attractively priced.
Lasco Manufacturing’s profit for the December quarter was effectively flat at $197 million but is up 32 percent for nine months period. With EPS at 17 cents for the year, to December, there was little fire power to move the stock price during the week. The same is true for Lasco Distributors, with a 24 percent rise in profit to $157 million for the December quarter and 16 percent increase for the nine months to December, to $620 or 18 cents per share. Lasco Manufacturing with EPS close to Lasco Distributors should really see the stock price moving closer to the latter than the $3.10 it closed at on Friday.
NCB Financial remains on the Watch List with strong gains in operating profit for the December quarter, but the stock is finding it hard to break through resistance at the $150 level and may need something out of the ordinary if the price is to move decidedly higher before the summer months.
Barita Investments is worth watching but with the price falling, having gone ex rights during the past week.

Watch NCB but Fontana may break out

Jamaica Stock Exchange listed companies will start releasing the December quarterly reports this week. Results could move prices depending on how investors view their strength or weaknesses.  
NCB Financial remains on the Watch List with strong gains in operating profit for the December quarter, resulting in increased demand for the stock last week with the price rising to $152.90 but two big trades on Friday peg the price back to $145. The stock should continue to see buying interest around the current level that could well result in another attempt at the $150 level as investors find it difficult to get meaningful supply at the $145 level. There is currently over 210,000 units on offer at $145. The price is currently below near term resistance at $150. If it breaks through then it faces another at $170 with $200 level being the next big one.
Fontana now has a bid to buy 904,281 units at $3.50, with just 56,452 units on offer, for sale at $3.60. A relatively high degree of overhang of supply of the stock that that was on offer, was bought on Thursday. The reduced supply could now pave the way for buyers to be more aggressive in acquiring shares to benefit from the strong potential gains that lie ahead. General Accident enjoyed greater demand in the past week with the price rising to $4. With the 2018 results likely to come out in the region of 45 cents per share that will provide solid incentive for the buyers to pick up the stock.

Fontana upcoming Waterloo Road branch

Jamaica Stock Exchange shares hit new highs during the past week with increasing interest being shown in the stock. Exposed supply is current not high and with expected continued buoyancy in the market and a big increase in new listings this year investors seem more aggressive to buy into what should be another year of increased profit for the company. Supply of Seprod’s shares continue to decline after a period of high supply following the public sale of 91 million shares that satisfied the market and resulted in increased selling as some investors took profit. The price has been inching higher over the past week or two and seems poised to move higher again in the coming weeks. Wisynco’s directors met last week and announced a 7 cents dividend. Most likely, the second quarter results would have been approve at that meeting and should be released this week. Last year results were posted on the JSE website on February 7. The second quarter results, are expected to be better than the first quarter. Revenue in the September quarter was negatively affected by some disruption in sales due to commissioning of new equipment.
The three Lasco companies should be releasing results for the December quarter by the end of the week and the prices could see some movements as a result.

NCB the stock to watch

NCB tis the stock to watch with big jump in profit from continuingh operations.

Investors in aggressive buying of NCB Financial shares in late 2018, pushed the group’s shares up to a record high of $161 on last day of November last, following full year’s results that were released earlier in the month.
If investors reacted so strongly to results that were telegraphed previously by the nine months results, it will be interesting to see how they react to the 29 percent hike in dividend and a 40 percent rise in profit before one-time income and taxation.
With profits from ongoing operations seeming set to rise to the $14 region this year, NCB Financial is clearly the stock to watch today.
The results could spark the start of the 2019 rally in the main market and push the price well beyond resistance around the $160 market and unto the next resistance around $200.
In pre market activity, the indication is that the stock will move higher than the $145 it last traded at on Thursday. With just over ten minutes to the start of trading, there are 20,300 units on the bid at $147 and ten at $145 to $145.01.

NCB share grows 10 times since 2014

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NCB stock closed at $159.05 on Friday.

NCB Financial stock sold at a record $160 last week for a gain of 60 percent for the year to date. Added to this return, are dividend payments totaling $2.80. While investors are now enthused about the stock pushing to new heights, not so long ago they were not with it selling at just $17.
In November 2014, NCB shares were being sold at $17 on several days but the banking group was about to release record profits of $11.6 billion or earnings per share of $4.73, this compares to EPS of $3.49 in 2013. As late as November 2016, the shares were trading at $46 each, less than 10 times the 2014 profit per share. In just two years since, the stock gained 248 percent plus dividends paid and since late 2014, the capital appreciation is a staggering 941 percent. The truth is that the group is not finished yet delivering for investors. When they take majority ownership in Guardian Holdings investors should see major cost savings from rationalization and increased business with the expanded resources.

NCB Financial hits up on resistance at $160 & may find it difficult to break through to the next level at $200, 25% away.

Long term investors should hold on to their stocks for the big ride ahead to flow from acquisition and the impact that growth in the Jamaican economy will have on the operation.
The stock that traded at $160 this past week is currently trading around resistance level, if it breaks through meaningfully, the next major resistance is at $200 or 25 percent away from current price.

SagicorFinancial & NCB at year’s high

NCB trades at record TT$8 or J$152 on the TTSE on Friday.

Sagicor Financial jumped 75 cents and NCB Financial Group 90 cents to close at a at 52 weeks’ highs and drove up the Trinidad & Tobago Stock Exchange up the cross listed and combined indices relatively sharply on Friday.
NCB Financial in jumping on Friday, is now priced in line with the close price in Kingston, now around $159. At close of the market the Composite Index climbed 22.82 points to 1,278.09. The All T&T Index declined 0.52 points to 1,691.10, while the Cross Listed Index gained 6.40 points to close at 116.79.
Market activity on the Trinidad & Tobago Stock Exchange ended on Friday with trading in 12 securities against 20 on Thursday, with 5 advancing, 1 declining and 6 remaining unchanged.
Trading ended with 611,620 shares at a value of $5,060,996, compared to 971,081 shares at a value of $36,439,815 on Thursday.
IC bid-offer Indicator| The Investor’s Choice bid-offer ended with stock with the bid lower than the last selling price and 2 with lower offers.
Stocks closing with gainsFirst Caribbean International Bank closed trading of 1,270 units with a gain of 5 cents to end at $8.05, JMMB Group gained 5 cents and completed trading at $1.75, after exchanging 141,281 shares, NCB Financial Group ended trading of 169,650 shares after jumping 90 cents and ended at a record $8, Republic Financial Holdings gained 26 cents to $107.26, after exchanging 251 shares and Sagicor Financial ended trading with a jump of 75 cents and settled at 52 weeks’ high of $10, with 283,131 stock units changing hands.
Stocks closing with losses| Prestige Holdings fell 15 cents and concluded at trading at $7.35, with 903 units exchanged.
Stocks closing firm| Clico Investments settled at $20.20, with 764 stock units changing hands, First Citizens ended at $32.76, after exchanging 5,577 shares, Grace Kennedy settled at $3, with 1,495 stock units changing hands, Scotiabank concluded trading of 500 units at $64.66, Trinidad & Tobago NGL ended at $29.12, after exchanging 6,152 shares and West Indian Tobacco concluded market activity at $95, with 646 units changing hands.

Prices of securities trading for the day are those at which the last trade took place.

Many more stocks to watch now

NCB had a good 2018 fiscal year with strong profit gains that boosted interest in the stock.

There was another big insider trade, in NCB Financial Group shares following last weeks’ big trade valued at $650 million.
Jamaica’s largest financial institution, advised the Jamaica Stock Exchange that a connected party sold 2,768,165 of the group’s shares and three directors and a senior manager purchased a total of 2,836,672 shares between November 23 and 26. This development is the clearest signs that the immediate future is extremely bright for the group.
The local stock market is showing major shift in sentiment with the news that Scotia Group is selling off of its insurance arm to Sagicor Group. The announcement drove up the prices of Scotia Group, Sagicor Group and Pan Jamaican that traded at a new high on Wednesday. But NCB continued to scale new highs on each day for the week. NCB has little supply coming onto the market as demand continues to climb.
All the above stocks are now the watch list, but investors must keep watch on Barita Investments that has shot up to a record high of $23 with a bid at $24.01. There is some amount of public chatter about the performance of the company that has encouraged more interest in the stock. The company will benefit from several developments in the financial market, including the impact of the change in accounting policy that will result in gains or losses in investments whether realized or not going straight to the profit and loss account. With growth in the stock market Barita should benefit in two ways, increased value of the portfolio, for example, 48 million JSE shares owned increasing around $100 million in the December quarter so far but Barita is said to also own shares in NCB that has risen sharply in price for the quarter. The equity linked unit trust will garner more fee income based purely on the fact that the portfolio would have grown based on gains in stock price. The other financial stock to be watched is Key Insurance that has traded over 21 million shares so far with the stock having a bid of $4 to buy over 911,000 shares. The movement in the Key shares seems like the start of an aggressive stance an investor, watch developments in this one keenly. Seprod also seems poised to rise with early selling from the public offer now appearing to be abating.
Mayberry Jamaican Equities is yet another to watch as the local stock market moves higher over the next several weeks and it could drag it mother company Mayberry Investments with it.

NCB still stock to watch

NCB had a good 2018 fiscal year with strong profit gains.

NCB Financial is in the news since it released record full year results and announced a dividend of 70 cents per share at the end of the first week in November, and was followed with the announcement that the way is cleared for them to go after another 22 percent of Trinidad and Tobago based Guardian Holdings.
In the past week news came that there were big insider trades in the stock. There is increased buying interest in the stock. Where the price will be in the short term is anyone’s  guess.

The main market All Jamaica Composite index is a shade away from 400,000 points at the close of the week, is recovering from recent low of 383,883.07 points on November 7, having fallen 8 percent from the record high of 418,450.70 on October 12. The market looks poised to move higher as the main sell off might be over, but there are few stocks that seems likely to gain this week.
Technical chart shows NCB Financial heading to $155 but it traded at new high of $138 during the past week which is not very far from the target of potential resistance. Whether it goes higher during the coming days is anyone’s guess but it is worth watching with all the positive news its getting as well as increased buying.

Some of Seprod’s products.

 Seprod pulled back from the record high of $62 a few weeks ago, to sit at $30.10, now that the public offer of shares has closed with the issue oversubscribed. The stock could move higher in the days or weeks ahead. Selling from those who bought in the public offer may keep the price anchored around current price for a while before the selling subsides.

Investors should be keeping their eyes on Scotia Group. Last year they released full year results on December 7 and can be expected to release this year’s, on the 6th, investors could well anticipate them and drive the stock ahead of the release. Currently, there are no Junior Market stock that seems set to move much at this time.

NCB is stock to watch

NCB Financial, released record full year results and announced an interim dividend of 70 cents per share at the end of the first week in November to be followed this past week, with the announcement that the way is cleared for them to go after another 22 percent of Trinidad and Tobago based Guardian Holdings on Friday with the NCB stock closing at a record high of $137.99.
The stock could make more gains in the week if demands picks up. Technical chart shows NCB Financial heading to $155, an area of potential resistance. The added Guardian ownership will add to earnings per share for the NCB group in the short term but longer-term synergies exits to take advantage of that should add even more to the bottom-line.
With just about all companies releasing quarterly results there is not much firepower that was released to move prices one way or the other, price movements will be more determined by perceived levels of under or overvaluation of individual stocks.
Investors should be keeping their eyes on Seprod that has seen increased supply with the recent public share issue having been allocated, the stock is considered a good buy at current trading of $30 or less. The company also posted results showing strong gains for the nine months. Stationery and Office Supplies that reported third quarter results that started to benefit from profit from the new book manufacturing business and continued strong sales growth. The stock price may well have factored in the good news but supply for sale seems limited.

Stocks to Watch This week

NCB Financial Constant Spring Road.

Last week’s stock to watch, former IC Top 10 listing, NCB Financial, released record full year results and announced an interim dividend of 70 cents per share with investors welcoming the news by driving the stock to a record intraday high of $135.
The stock closed the week at $133 with good volume passing through the market. Demand is building for NCB Financial between $125 and $131, with offers at $133, $135 and then at $138. The stock could make more gains in the week if demands picks up. Technical chart shows NCB Financial heading to $155, an area of potential resistance, that means that the current price is not very far from the short-term target.
This coming week, several companies will report results for the third quarter. Some of them could result in stock price movements. Other stocks to watch this week are Stationery and Office Supplies that should report third quarter results that should benefit from profit from the new book manufacturing business as well as from contract that was being worked on from the second quarter and slated for completion in the third quarter. Seprod is another to watch, now that the allocation of the 92 million shares that were recently offered to the public should be known on Monday. Third quarter results will be pasted during the week but when that is combined with the likelihood that many investors will end up getting only a small amount of the shares they applied for, it will be anyone guess what impact both could have on the price in the secondary market.
Following the release of full years’ results with an increase of 84 percent to $374 million and a 315 percent increase in the last quarter to $193 million at Barita Investments, investors have been buying the stock in a second wave of demand, its one to be watched going forward. The Jamaica Stock Exchange has been enjoying increasing trading in the second half of the year and this is expected to provide a big boost in profit for the quarter and year to date, the stock should benefit in the coming week from this.

Shake up in IC Insider Top 10

Volatility was the order for the Jamaican stock market for the past week as the market indices bounced around as declining stocks were plentiful as the Junior Market ended with three changes and the main market two.
The Junior Market lost Access Financial that closed the week at $49 from $45.50 to start the week. Iron Rock Insurance that climbed to $4.82 from $4.50 and Lasco Manufacturing that inched up to $3.60 from $3 exited as well. Coming into the Junior Market TOP 10 are Elite Diagnostic, Dolphin Cove and Lasco Distributors.
Caribbean Cement reported third quarter results with lower profit for the nine months than for 2017 but foreign exchange losses was the main factor. The exchange rate has now reversed and that should turnaround the negative impact by the end of the year, nevertheless IC downgraded full year earnings to $3.53 per share, resulting in the stock dropping out of the main market TOP 10 along with JMMB Group that rose back to $34 from $32. The moves allowed Barita Investments that fell to $18 and Salada Foods that slipped to $21.50 to re-enter the top list.
The main market closed the week with the overall PE slipping to 15.4 from 16 from the previous week, the PE of the Junior market moved up to 15.4 from 16.4 at the close of the prior week.
The PE ratio for Junior Market Top 10 stocks average 9.1 and the main market PE is now 9.6.
The TOP 10 stocks now trade at an average discount of 41 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings. The main market stocks trade at a discount of 37 percent to the overall market.
TOP 10 stocks are likely to deliver the best returns within a 12 months period. Stocks are selected based on projected earnings for each company’s current fiscal year. Based on an assumed PE for each, the likely gains are determined and then ranked, with the stocks with the highest potential gains ranked first followed by the rest, in descending order. Potential values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Earnings per share are revised on an ongoing basis based on new information received that can result in changes in and out of the list as well.
There will be no Market Watch report this week.