Express Catering enters TOP 10

Ian Dear, Managing Director of Express Catering

Trading started in Express Catering shares on Friday on the Junior Market, with the stock enjoying strong demand up to the $3 level. New information obtained this past week from the prospectus resulted in the earnings for this company being upgraded and it is included in the TOP stocks.
Importantly for Express Catering, the prospectus states that effective at the end on of May, the contract that gave rise to the payment of management fees was cancelled. The amount, the equivalent to 9 percent of revenues or roughly US$1.4 million will no longer be paid and should go towards boosting the bottom-line, and should result in the earnings per share around J$0.26 cents for 2018 fiscal year. The change means it is now a part of the TOP 10 Junior Market stocks. With the strong demand for the stock, it should spend just a short time in the list. The same out turn seems likely for Stationery and Office Supplies (SOS) once it starts to trade, with the IPO being nearly 4 times oversubscribed with more than 1,000 applications received for the 52 million shares.
With the initial public offers now out of the way, trading in the secondary markets saw more energy in the past week than for the previous two, with some stocks that were weak before, finding buying at the lower prices.
ISP Finance price rose to $14 after falling to $11 during the past week, but big declines in the prices of AMG Packaging and Caribbean Cream pushed out ISP as well Caribbean Flavours and CAC 2000 out of the top listing.
The only movement in and out of the TOP 10 in the main market were Sagicor Group that spent just one week a short while ago, coming back, as Cable & Wireless dropped out with a big gain in the price in the past week of 17.5 percent.
The average PE ratio for the Junior Market Top stocks is down at 6.6 with SOS in at a PE of 5 times 2017 earnings. The PE for the main market TOP 10, holds at 6.7. The average PE for the overall main market, remains at 13 and 12 for Junior Market, based on 2017 estimated earnings.
At the close of the week, IC’s TOP 10 Junior Market stocks now trade at an average discount of 45 percent to the Junior Market average, while those in the main market are trading at a 49 percent discount, to the average of the market, leaving stocks with room for growth in the months ahead.
Last week IC Insider indicated that two stocks to watch were Cable & Wireless with the price around support level and NCB Financial with very limited number of stocks currently being offered. Both stocks bounced with the former rising over 17 percent to 94 cents and NCB rising to $75 from $71.50. Active supply for NCB is very low currently and technical chart suggests a big break out for it very soon. NCB is to be watched for a possible break towards $80 and Express Catering to well over $3.

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