The big news for the market for the past week was the release of the prospectus of the long-awaited Initial Public offer of Spur Tree Spices priced at $1 per share at PE of 8.7 based on earnings before tax and propelling the stock in this week’s Junior Market ICTOP10. Investors should also see the prospectus release for Jamaica Fibreglass Products this week or next.
Spur Tree pushed Jetcon Corporation out of the TOP10, with the latter enjoying a 9 percent price rise to 99 cents. Over in the Main Market TOP10, Sagicor Group rose just 2 percent to close at $53.
During the week, AMG Packaging rose 3 percent to $2.12, Access Financial Services climbed 7 percent to $20.95, Lasco Distributors rose 6 percent to $3.47, but Elite Diagnostic and Honey Bun both fell 10 percent to $2.71 and $8.55, respectively and Caribbean Cream fell 4 percent to $5.70.
The public offer for Spur Tree Spices shares opens on Wednesday this week and should be heavily oversubscribed, with closure likely by the end of the week.
This week, the top three Main Market stocks are Guardian Holdings, followed by JMMB Group and Radio Jamaica, all projected to gain between 183 and 261 percent, up from 178 and 257 percent last week.
The Junior Market top three stocks changed a bit during the week, with AMG Packaging leading, followed by Caribbean Assurance Brokers, with Access Financial Services moving from the second spot to the third position. All three can gain between 158 and 230 percent versus 167 and 240 percent previously.
The average gains projected for the TOP 10 Junior Market stocks moved from 149 percent last week to 151 percent and Main Market stocks moved from 155 percent to this weeks’ 154 percent.
The Junior Market closed the week with an average PE of 14.4 based on ICInsider.com’s 2021-22 earnings and is currently well below the target of 20 and the average of 17 at the end of March this year based on 2020 earnings. The TOP 10 stocks trade at a PE of a mere 8.1, with a 44 percent discount to that market’s average.
The Junior Market can gain 39 percent to March next year, based on an average PE of 20 and 18 percent based on an average PE of 17.
Eleven stocks representing 26 percent of all Junior Market stocks with positive earnings are trading at or above this level, similar to last week, indicating that many others will rise towards the 17 mark in the months ahead.
The average PE for the JSE Main Market is 16.1, some 18 percent less than the PE of 19 at the end of March and 24 percent below the target of 20 to March 2022. The Main Market TOP 10 average PE is 8.1, representing a 51 percent discount to the market and well below the potential of 20. A total of 13 stocks or 28 percent of the market trade at or above a PE of 19, with most over 20, for an average roundabout 25, suggesting that the accepted multiple is between 20 and 25 times the current year’s earnings.
ICTOP10 focuses on likely yearly winners; accordingly, the list may or may not include the best companies in the market.
ICInsider.com ranks stocks based on projected earnings to highlight winners from the rest, allowing investors to focus on potential winning stocks and helping to remove emotional attachments to stocks that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to March 2022 and ranked in order of potential gains, based on the possible increase for each company, considering the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in weekly movements in and out of the lists. 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.
