The Junior Market continues to fight for the 2018 rally to take root and grow even as interest rates are at their lowest in decades. Technical reading of this market shows the short term 45 day moving average (DMA) has crossed over the 120 DMA, a bullish sign as the market is coming from an oversold position.
With many Junior Market stocks having risen sharply in the last twelve months, it would require gains in profit above most of the recent postings to have pushed prices much higher in the short term. In a number of instances, some junior listed companies are focusing on expansion that will not bear fruit immediately and with some of the stocks pricing in these development into prices already, there are no new information to move prices in the short term. Results for the 2018 first quarter will therefore be critical in determining the performance of the market for the first half of the year.
Stationery and Office Supplies got a shot in the arm from audited financial statements to December 2018, showing strong gains in revenues and profit, compared to 2016 and saw the price moving back up to $5.50 and its position in the TOP list down to 8 from number 2 in February. It won’t be long before it drops out of the list as demand push the price higher. General insurance underwriters Iron Rock is now in the list, following improved 2017 results that benefited from strong revenues growth that augurs well for earnings in 2018. The company should also benefit from rising premium rates. Paramount Trading is back in the list and so too is AMG Packaging having disposed of its machinery in the tissue operations and cut cost it in it as well from the closure of that business line. 
Going into the 2019 fiscal year it should be rid of most of the cost of that operations and therefore focus on the container boxes to meet the existing increased demand. Out goes Dolphin Cove with lower than projected earnings being reported for 2017, followed by Blue Power and tTech with lower results for 2017 than previously projected, that will likely negatively affect 2018 earnings for these companies.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.3 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 37 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.
Iron Rock & 2 others in TOP 10
March 11, 2018 by
