Cable & Wireless is possibly the main stock to watch for the coming week with the company returning to profitability in the June quarter.
The company lost several billion dollars for many years but posted a profit of $222 million in the latest quarter on an 11 percent surge in revenues. Subsequent to the close of the quarter, Cable and Wireless increased rates on a series of services that should add to revenues and profits in the coming quarters. Profit for the full year to December should end positively, thus wiping out the $311 million loss for the first half of the year after tax and a lower pretax loss of just $199 million. The recent turn around in the fortune of the company is likely to be a big surprise to many investors and will help move the stock price much higher than the $1.07 it closed at, on Friday.
Other stocks that investors should keep an eye on this week include, Barita Investments with an announced take over offer on the table, JMMB Group, Stationery & Office Supplies that just listed and selling below potential, NCB Financial with limited supply, Jetcon Corporation with profit doubling for the half year leading to strong buying in the past week and recently listed Express Catering with demand to buy 765,925 shares at $5.50.
NCB breaks out & heading higher
NCB Financial Group broke out of a triangle pattern over the past week, as the price hit a record $81 on Friday. The technical indicator is signaling a strong buy signal and a huge movement ahead, with the group reporting strong gains in profit for 2017 over 2016. The stock has traded in a very narrow band in the $70 region for a number of months as it consolidated ahead a the big move it seems ready to make with limited supply coming into the market. Results for the none months to June suggest earnings in excess of $8 per share for 2017 with more to come in the new year starting in October. IC Insider.com placed the stock two weeks now on a market watch list.
Neveast the next office supplies IPO
It was a big giveaway for those familiar with companies prepping for listing, by way of a pending initial public offer of shares. The Jamaica Observer newspaper on Wednesday, July 26, carried an advertisement for Neveast Supplies Limited, telling readers that they were celebrating 55 years of service to its customers.
The advertisement also stated that they were leader in stationery, office furniture and office supplies. In true Jamaican nationalistic style, the advert was rapped in the black, green and gold of the Jamaican flag, no doubt in synch with the 55 years of independence celebration this year.
Industry players say, they may be one of the biggest in stationery and office supplies but not of the office furniture and fixtures. Regardless, checks by this publication with persons knowledgeable about the company’s future plans, confirmed that they are likely to be the next stationery and office equipment to list on the Junior Market of the Stock Exchange. Recently, competitor Stationery and Office Supplies concluded a successful initial public offering of shares that were several times oversubscribed and are set to be the first to list when trading in the stock is expected to commence on August 9.
The brokers to the issue when it does take place, will be Mayberry Investments. Our sources state that they have been contemplating this move from at least 2016, but there are a few issues that need sorting out and should definitely be going to the market to raise capital and be listed before the end of 2017.
According to the company’s website, Neveast Supplies Limited is a family owned Jamaican company that started in 1962 when Founder, Neville East, decided to service the country’s stationery needs. Through market penetration and the help of his wife, Pamela, Neveast Supplies Limited expanded operations to include the supply of office and systems furniture.
Today, the second generation of Easts are at the company’s helm to oversee the daily operations. Sons, David, Paul and Gregory together with thirty-two other members of staff are devoted to the company’s success and ensure that Neveast remains the leader in office furniture and supplies with competitive prices on high quality products and efficient company service.
Neveast continues to be the authorized local distributor for international brands such as Teknion Inc, Global Upholstery Inc, MIN Office Furniture, Godrej, Aurora, Moderco, Virco, and a host of stationery manufacturers from across the globe. With its headquarters located in Kingston, the company’s distribution network covers the entire island of Jamaica and recently includes coverage in neighboring Caribbean countries.
IC Insider.com has been reliably informed that Mayberry Investments should be brokering another two public offers by the end of September and possibly a third by the end of 2017, while there are listings being worked on by other brokers.
JSE Q2 profit jumps 41% one to watch
A sharp fall of $92 million in Exchange Operations’ revenue for the half year to June, resulted in the segment results falling $110 million to $41 million but a 41 percent rise in Depository Services’ revenues to $156 million and 20 percent in Trustee Services’ income to $137 million resulted in the segments’ profit rising by 83 percent and 17 percent to $82 million and $75 million respectively.
The improved performance in the newer services of the Jamaica Stock Exchange saw second quarter results increasing over the performance of the first quarter with a rise of 41 percent in profit after tax compared to a decline in the first quarter versus the strong 2016 first quarter. The gains in the June quarter reduced the fall in profits for the by percent to $102 million, compared with the corresponding financial period last year of $158 million. The six months performance resulted in earnings per share of 15 cents, the June quarter returned 6 cents per share.
Total Expenses grew 19 percent over the 2016 quarter to $167 million and 13 percent for the six months to $330 million. Major increases were experienced in professional fees which included cost for defending claims against an employee and advertising and marketing.
“It is expected that for the remaining quarters there will be more companies listing their securities on the exchange and a positive movement in fee income due to the expected increase in trustee Services clientele,” the chairman, Ian McNaughton and Managing Director Marlene Street Forrest stated in a release to shareholders accompanying the financials.
The balance sheet shows assets of $1.24 billion, cash funds of $517 million and stockholder’s equity of $891 million.
IC insider.com is forecasting earnings per share of 35 cents for 2017. The stock last traded on the Market of the Jamaica Stock Exchange at $6.
50% off sale for TOP 10 stocks
TOP 10 stocks are selling at a discount to the rest of the market of 50 percent, making them the stocks with the best appeal for investors looking for above average returns.
The best indicator that investors who want to beat the market is the be found in the TOP 10 or stocks close to them is the low valuation compared to the market average and ultimately targeted PE based on where the market is based on 2016 earnings. At the close of the week the TOP 10 average PE ratio is 7.5 well off the average market PE of 12 for the junior market while the main market TOP 10 average at 6 is just half the average market PE of 12.
Quite a number of the TOP stocks pulled back in price during the week, with just a few moving higher, one ending at a 52 weeks’ high, another hit a new high and pulled back below the previous week’s ending price.
ISP Finance hit a new high during the past week of $12 and sits just below at $11.75. In the main market Berger Paints hit a new high of $15 during the week but selling pushed it down to $11 at the end of the week
The sharp movements resulted in Dolphin Cove moving out of the TOP 10 junior market list and let in Access Financial which fell in price during the week from $43.80 to as to a recent low of $32.81. Access bounced back to close at $35.62, still low enough to push it back in the TOP 10.
The past week saw some volatility in prices similar to what occurred in the previous week as the thinness in the supply and demand for many stocks leaves prices more exposed than just a few weeks ago when demand was greater.
The 2017/18 budget was officially disclosed the week before, but had little negatively or positively for investors in the short run, longer term there may be winners with a large pool of workers having more disposable income and in the case of Carreras, the tax imposed will mean that the company will take advantage to increase prices and ensure continued growth in profits.