Better than expected reported profits compared with the prior period has been the driver of local stock prices since last year into the current year. Late last year, Transjamaican Highway and Scotia Group reported a surge in profits over the previous year and investors rewarded them with a jump in their price and they did that for Caribbean Cement that released results early last week.
Last week, investors drove up General Accident shares to a new 52 weeks’ high and so too Caribbean Cement. The above are clear messages that profit growth outweighs interest rates as the driver of stock prices.
Three companies reported above average profits that should help lift prices over the coming days or weeks and are worth watching.
Caribbean Cement rose from $58 last week to trade as high as a new 52 weeks’ high of $69.90 in response to profits in the first quarter to March this year, from an increase of nearly 12 percent in revenues to $7.6 billion from $6.8 billion in 2023 with profits jumping 546 percent to $1.9 billion compared to a mere $289 million in last year first quarter.
Based on closing quotes buying interest is at the $60 level with a few shares at $61 but offers are at $69 to $70 levels and above. The gap could result in a standoff for a few days, with the stock popped strongly already.
General Accident reported earnings of $0.39 per share in its interim financial report for 2023 but released audited accounts with $0.52 per share earnings instead. The audited accounts show profit revised to $0.71 from $0.53 previously reported in 2022, based on the new accounting standard – IAS17 which requires insurance companies to report income and expenses dramatically differently from the previously used format.
ICInsider.com forecast earnings of $1.10 for the 2024 fiscal year. In the past two months, there was heavy buying in the stock, with 223,053 traded on Friday with the price closing at $6.50. A total of 1,026,154 units were traded during the week. In April, trading amounted to 19.77 million units and 23.8 million shares in March. These numbers suggest that Mayberry Investment disposed of the majority of shares they previously owned. At the close on Friday, there were only 8 offers on the board, amounting to less than 20,000 shares, up to a price of $9.57. There are 300,000 units on the bid over $5.95.
Caribbean Assurance Brokers selling at a PE of just 3 based on current year’s earnings.
Caribbean Assurance Brokers reported solid gains in profit for 2023 compared to 2022. The latest audited results show the company earning $0.47 per share, in line with ICInsdier.com’s projection before the release of the third quarter results that showed a fall in revenues and profit. The company reported earnings of $0.30 per share in the previous year. ICInsdier.com projects earnings of $0.65, for 2024.
Buying is strong at the $2-2.20 level but with the results, many of these bids will move up to meet supply, mostly at $2.55 and above. With the latest results, released after trading on Friday, there should be major adjustments to bid and offer prices at the start of trading on Monday.
Dolphin Cove closed at a 52 weeks’ high of $20.03 and seems to be grudgingly moving higher, with bids mostly under $20 for small amounts. Offers are drying up with just 14 on the board, between $21 and $25, amounting to 144,000 shares. The trendline indicates the price slowly moving towards $23 in the weeks ahead. With the first quarter results due in days, the trajectory could accelerate with tourist traffic and the recently increased dividend payment suggests that profit should be seeing a bounce.
Also to be watched is Caribbean Producers with just 4 bids at the close on Friday, but sellers are overwhelming buyers at the close. The price looks set to fall below $8, before too long.
JMMB Group is another stock under pressure with more sellers than buyers. NCB Financial releases results on Thursday and is expected to declare an interim dividend.
