There was much activity in the Junior Market this past week, with the market index bouncing over the 3,800 mark for the first time since the middle of March, resulting in Caribbean Cream moving to $4.45 during the week but closed at $3.20 after traders pushed the stock down sharply on Friday, but Lasco Distributors shot to $3.31 and Lasco Manufacturing to $4.48 at the close with both moving out of the Junior Market ICTOP10.
Lasco Distributors and Lasco Manufacturing are still priced at less than 10 times 2023 fiscal year earnings when many others are priced over 15 times. Additionally, the company’s directors meet this week to consider dividends. Distributors is seemingly set to pay around 12 cents per share and Manufacturing 13 cents. With the dividend likely to be paid in July, the annual yield will equate to 42 percent and 35 percent, respectively, if the shares were acquired now. Replacing the two Lasco Companies are iCreate following a drop in the price to 95 cents and Edufocal closing at $1.78.
The Main Market TOP10 stocks remained the same as the week before, with the market struggling throughout the week, with four days of significant declines in the market index as selling pressure pushed prices down, resulting in just one stock, Transjamaican moving up in ICTOP10 with the largest gain of just 4 percent, with the stock hitting a record closing high of $2.11 on Friday. The chart shows it has the potential to gain another 200 percent. Berger Paints fell 9 percent to a 52 weeks’ low of $6.87, followed by JMMB Group with a loss of 4 percent to close at one year low of $28.75, Jamaica Broilers is down 3 percent to $35 and Scotia Group dipped 3 percent to $33.60 despite reporting increased profit for the first half of the 2023 fiscal year, with the second quarter almost doubling the similar quarter in 2022.
Lasco Distributors climbed 19 percent following an 11 percent rise last week to close at $3.31 and is up 59 percent from the 2023 low of $2.08 in April. Five stocks rose 6 percent: Caribbean Assurance Brokers, Dolphin Cove, General Accident, Consolidated Bakeries and Lasco Manufacturing, while One on One slipped 3 percent at the end of the week to be the biggest loser.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.7, well below the market average of 13.2. The Main Market TOP10 is projected to have an average of 265 percent, to May 2024, based on 2023 forecasted earnings.
The 15 most highly valued Main Market stocks are priced at a PE of 15 to 98, with an average of 30 and 20 excluding the highest PE stocks and 18 for the top half excluding the stocks with the highest valuation.
The Junior Market Top 10 PE sits at 5.3 compared with the market at 10.4. There are 10 stocks representing 21 percent of the market, with PEs from 15 to 25, averaging 19 are well above the market’s average. The top half of the market has an average PE of 15, possibly the lowest fair value for Junior Market stocks currently. Junior Market is projected to rise by 283 percent to May 2024.
The differences between the average PE ratio of the Main and Junior Markets and the overall market valuation are important indicators of the likely gains for ICTOP10 stocks.
ICTOP10 focuses on likely yearly winners. Accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks will likely deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.
