NCB is back IC Top 10

NCB Financial Group is back IC Main Market TOP 10 stocks as the price slipped slightly by the end of the week to $135.90. There were no changes to the Junior Market TOP 10 lists.
This week’s focus:  NCB shares have been under selling pressure, with the group reporting lower second-quarter profit than the prior year and concerns about losses that can occur from their loan portfolio. They announced measures to continue their focus on cost-cutting, with a proposed restructuring of the insurance arms that will lead to lower costs. In addition, they announced the cutting of 121 staff members that will lower operating costs, going forward. Investors can expect more adjustments in the group that will flow from the acquisition of the majority shareholding of the Guardian group.
The top three Junior Market stocks this week, with the potential to gain between 260 to 695 percent by March 2021, are Caribbean Producers, followed by Lasco Financial, while Caribbean Cream and Lumber Depot share the third position. In the Main Market, the top three stocks continue to be Radio Jamaica continues to lead, followed by Berger Paints and JMMB Group with expected gains of 186 to 208 percent.
The targeted average PE ratio of the market is 20 based on profits of companies reporting full year’s results for the financial year ending after the second quarter of 2020, up to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level. The JSE Main Market ended the week, with an overall PE of 15.2 and the Junior Market at just 10.7, based on IC’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks averages a mere 5.7 at just 53 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at 8.6 or 57 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 284 percent, for the Junior Market and 141 percent for the JSE Main Market, based on 2020-21 earnings, an indication that there is the potential to make greater gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021. The expected gain for each stock is based on earnings and PE ratios for the current fiscal year. The ranking of stocks is done in order of likely increases. The highest-ranked stock is the most attractive. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

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