Mayberry’s latest stock picks
Mayberry Investments released their most recent recommendations for 6 Jamaica Stock Exchange listed stocks that they say are BUYS and their closing prices for 19th November.
The stocks selected are considered undervalued by Mayberry and are shown with earnings and PE ratios and comprise:• JMMB Group: $13.91 per share – P/E ratio 7.31 • Jetcon Corporation: $4.97 per share – P/E ratio 12.18 • Jamaican Teas: $4.10 per share – P/E ratio 10.73 • Sterling Investments: $15.50 per share – P/E ratio 8.34 • General Accident Insurance: $3.06 per share – P/E ratio 6.20 • Pulse Investments: $3.90 per share – P/E ratio 4.21
Mayberry indicates, that recent stock splits provide additional buying opportunities as stocks are more liquid and list the following as the candidates to benefit from stock splits.
Paramount Trading, Jamaica Stock Exchange, Cargo Handlers, EPPLEY Limited that will split the it’s $735 priced stock into 150 units, to take effect from the opening of trading on Thursday, December 1.
The Mayberry report also states that company developments that are positive, include the granting of commercial banking licence for the JMMB Group, Initial Public Offerings (IPO’s) to come within the next 3 months that will provide opportunities for new Investments as well as expansion plans at Honey Buns and National Commercial Bank’s record profits.
Stock splits, create more liquidity in the stocks of companies that undertake them. Investors in the Jamaican market have driven most of the stocks that have split to full valuation and pushed the vast majority to be amongst the highest valued on the market.
Quick about turn at Key Insurance
The second quarter was negatively affected by an Insurance claims of $747 million compared to just $82 million in 2015 for the same period. In the September quarter the insurance company benefited from a positive turn around for claims.
The claims experience in the second quarter forced the company’s management to review the insurance claims and reserves quarterly rather than annually in the past. The end result is that claims seem to be back to normal in the third quarter with a net recovery in claims of $228 million as opposed to an expense of $193 million expensed in 2015.
Nine months profit ended at $66 million compared to $68 million for the 2015 period and seems set to reach $120 million for the full year, for earnings per share of 35 cents. At this level of earnings, the stock has a PE of 6, the lowest in the junior market.
Key generated net premium income of $166 million up 25 percent over 2015 and $451 million for the nine months, an increase of 28.5 percent. Administrative expenses rose from $77 million in the 2015 third quarter to $100 million in 2016 and for the nine months to $281 million from $220 million.
The stock last traded at $2 on the junior market of the Jamaica Stock Exchange.
Stock split consideration for Eppley
The directors of Eppley Limited will meet on Thursday, November 10, 2016 to consider the payment of an interim dividend to stockholders and a stock split.
Eppley last traded at $735 on the junior market of the Jamaica Stock Exchange. Since listing in July 2013, the stock has traded infrequently, even after the number of issued ordinary shares, were increased this year, with the issue of additional shares by way of a rights issue. In May the company issued 487,703 new ordinary shares priced at $650 each, bringing the total ordinary shares outstanding to only 1,283,122 units.
Profit for the June 2016 quarter amounted to $29 million $40.5 million for the half year, up from $22.5 million for the six months to June 2015.
The company is primarily in the business of insurance premium and lease financing.
Paramount best Top 5 performer
Paramount Trading having closed on Friday at $23.95 ended up as to top performing stock since IC Insider started the Top 5 selection list. All selections recorded gains since they were identified as top stocks.
For the week ended on October 14, Jetcon Corporation emerged as the leader of the list of junior market stocks with the greatest potential gains followed by Access Financial Services, Derrimon Trading rose to over $4 and slipped off the list at the end of the week. Knocking at the door of the list are tTech and Dolphin Cove followed by Derrimon Trading.
Main market stocks all remained in the Top 5 but with changes in position with Barita Investments moving down to number 3 with the price moving to $4.65 and Berger Paints holding the top spot. Sitting just below the Top 5 are Palace Amusements. JMMB Group, National Commercial Bank, Mayberry Investments and Sterling Investments all with potential gains over 100 percent.
IC Insider started the Top 5 selection as of September 9 and with just over a month having passed IC Insider looked at the performance of all the selections. Paramount Trading topped the list with a gain of 71 percent followed by 31 percent for Derrimon Trading and 27 percent for Medical Disposables in the junior market and a 48 percent gain for Barita Investments followed by a gain of 35 percent for JMMB Group.
Stock split for Paramount Trading
No recommendation is being put to the shareholders as to the level of the split. The timing and extent of the split is proposed to be left for the directors of the company to determine. The resolution included on the agenda of the annual general meeting and included in the company’s annual report states: “That each of the issued ordinary stock units in the capital of the company be sub-divided in accordance with the Articles of Incorporation of the company, into such number of stock units as may be prescribed by the Board of Directors.”
Based on the current stock price of $17.50 and lack of supply, the split seems likely to be in the order of 5 or 6 to 1. The top 10 shareholders of Paramount own just over 95 percent of the 154.24 million shares issued by the company.