In Thursday’s trading on the Jamaica Stock Exchange, the market was directionless with advancing stocks numbering just below declining ones and the IC market indicator showing investors in a tussle over the immediate future direction of the market. Prices of 6 stocks rose and 8 declined as 20 securities traded resulting in 3,602,192 shares changing hands valued at $19,621,158 in another lacklustre session.
Main Market| All advancing shares in the market was in the main market and all but one stock that declined was also in this market, but the indices moved up slightly, with the JSE Market Index inching up by just 1.23 points to 74,599.03 and the JSE All Jamaican Composite index edging up by only 1.38 points to close at 82,123.43.
Gains| Stocks recording gains at the end of trading in the main market are Berger Paints trading 89,657 unitss to close with a gain of a cent at $1.68, Caribbean Cement gained 21 cents to close at $3.91 with 20,500 units changing hands, Carreras traded 443 shares to close 6 cents higher at $33.56, Ciboney with 50,000 shares by increasing by a cent to close at 12 cents for a new 52 weeks high, Grace Kennedy 7,439 shares with a gain of $1 to close at $58 and Jamaica Money Market Brokers with 451,214 ordinary shares to close up by 4 cents at $7.24.
Firm| There were only 5 stocks in the main market to close without a change in price as Gleaner with 228,484 shares closed at $1.10, Hardware & Lumber traded 3,300 units and closed at $11.70, Mayberry Investments with 3,060 units closed at $1.70, Scotia Group had 59,888 units changing hands to close at $20.62 and Seprod traded 685 shares in closing at $10.84.
Declines| The number of stocks that declined in the main market are Cable & Wireless with 1,500,888 units while losing a cent to end at 40 cents, Desnoes & Geddes with 76,472 shares to end at $4.30 as the price lost 30 cents, Jamaica Broilers with 450,872 shares to close at $4.86, down 4 cents, Jamaica Producers that traded 6,600 units to close at $18.26 while losing 4 cents, National Commercial Bank 571,665 shares as the price closed with a 10 cents lost, at $18, Sagicor Group had 50,529 units changing hands to close with a fall of 71 cents to $9.50 and Salada Foods 2,400 shares to close 45 cents lower, to end at $7.50
Junior Market| The JSE Junior Market Index declined by 0.59 points to close at 743.20 as only 2 junior market stocks traded at the end of the trading session.
Gains| No stock gained at the end of trading in the junior market.
Firm Trades| Lasco Manufacturing was the only stock in the junior market that traded to close at the same price as the previous trading day with 27,096 units to end at $1.20.
Declines| Caribbean Producers was the only stock declining in the junior market at the end of trading as the price fell 9 cents to close at $2.91 as it traded a mere 1,000 units.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with the bid higher than the last selling price and 6 stocks with offers that were lower.
Market directionless
Hibernating stocks awaken on TTSE
A number of stocks that have either not traded in months or seldom traded from as far back 2013 surfaced from their slumber in Thursday’s trading on the Trinidad Stock Exchange. Included in the list, are Ansa Merchant Bank, Berger Paints, Flavorite Foods and Prestige Holdings. The change flushed out some stocks that were showing signs that they would fall when they next traded as offer prices were lower than their last selling price for some time.
Market activity resulted in the trading in 13 securities of which 5 advanced, 4 declined and 4 traded firm resulting in 106,402 shares changing hands, valued at $2,855,845 and moving the Composite Index down by 1.31 points to 1,171.77 while the All T&T Index fell by 2.61 points to close at 1,988.18 and the Cross Listed Index remained at 46.62.
Gains| Stocks recording gains in the market are Ansa Merchant Bank contributing 9,411 shares with a value of $361,226 as the price moved up 10 cents to end at $38.40, Clico Investment Fund with 24,180 shares valued at $528,333, the price advanced by 9 cents to end at $21.85. One Caribbean Media with 200 shares at $19.75 while gaining 5 cents to record a new 52 weeks high at the close and Republic Bank while trading 2,953 shares at a new 52 weeks high of $120.10 with a gain of 2 cents and Scotiabank with an increase of 90 cents to end the day at $71.00 while trading 205 shares.
Firm Trades| Angostura Holdings traded 602 shares at $11, Berger Paints 100 units at $3.60, Jamaica Money Market Brokers saw 39,340 shares changing hands for a value of $22,030 as the price closed at 56 cents and Neal & Massy traded 20,038 shares for $1,328,720 to close at $66.31.
Declines| First Citizens Bank traded 5,608 shares valued at $197,169 as the price slipped by 25 cents to end at $35, Flavorite Foods fell $1.21 to close at $7, a new 52 weeks low, Guardian Holdings 1,755 shares at 25 cents lower at $13.75, Prestige Holdings traded only 10 shares to close at $9.29 for a 1 cent decline.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bids higher than their last selling prices and only 1 stock with the offer that is lower.
D&G, Carreras & C&WJ now Buy Rated
IC Insider has added Desnoes & Geddes, Carreras and Cable & Wireless Jamaica to the Buy Rated list.
Desnoes & Geddes reported gains of 21 percent for the six months to December, earnings excluding one-off items and is poised to earn 80 cents for the full year ending in 2014. Forecasted earnings for the 2015 year is $1.10.
For Carreras the worse seems to be over with the last set of interim figures showing sales starting to recover from the impact caused by the price increase and the stock piling of cigarettes in the 2012 December and March 2013 quarters. IC Insider’s forecast is for earnings of around $5 per share for the year to March 2014.
Cable & Wireless’ sharp increase in cellular revenues and cost cutting will change the bottom-line markedly going forward.
Berger Paints Jamaica has been added to the market watch list flowing from a revival in earnings for the March 2014 year.
Related posts | D&G elevated to Buy Rated! | Carreras is back | CWJ loss down with much progress | Berger keeps profit gains
Image courtesy of suphakit73/FreeDigitalPhotos.net
Berger keeps profit gains
Berger Paints reported continued gains in profit for the current year which ends in March with a 30.7 percent increase for the December quarter and 33.7 percent for the nine months period.
The growth for the period is down on the performance to September last year when profit was up 80 percent for the six months and revenues grew by 12 percent after a 17.8 percent jump in the September quarter. Revenues gained only 6 percent for the December quarter and 9.3 percent year to date. Cost reduction would have facilitated to robust increase in net profit out turn. Profits after tax amounted to $51 million from the quarter versus $39 million in 2012 and $64 million year to date compared to $48 million in 2012 on revenues of $622 million for the quarter and $1.409 billion for the nine months. The information was disclosed in an abridged version of the interim report that provided no details of expenses.
Berger has current assets of $792 million at the end of December and current liabilities of only $149 million with equity capital of $522 million.
After paying a dividend of $27.86 million in July, the company had cash on hand in December amounting to $58 million that is down from $163 million at the end of December 2012 and $130 million at the end of the March 2013, but the cash position is an improvement over the $33 million on hand at the end of September.
A lot of Berger’s fortunes are tied to the buoyancy of the construction sector. The sector had not been performing well since 2008 and that has weighed down on the company’s fortunes. The moderate increase in the monetary value of sales is a reflection of the challenges they face. What has been the major attraction for the stock is the tendency for a high dividend payout that enhances the rate of return on investment for outside investors.
Related posts | Profits up 80% at Berger Jamaica | Economy pressuring Berger
GSE: Stocks poised for correction
Friday, 13th December 2013 | The Ghana Stock Exchange fell slightly for the week to Thursday but gained on Friday by 5.07 points to end marginally above last week’s close. The main market index closing at 2130.87 up from last week’s 2,129.69 for a 77.19 percent gain year to date and the financial at 1,780.47 up from 1,774.36 the week before for a 70.57 percent gain for the year to date.
At the end of trading, the price of 3 stocks were down and 3 were up for the week. The marginal change to the index is reflective of the narrowness of the number of stocks with price movements in either direction.
For the week, Aluworks gained 25 percent as the price moved up by GH¢0.01 to GH¢0.06, Cocoa Processing Company dropped 50 percent to hit GH¢0.01, Starwin Products dropped 25 percent to reach GH¢0.03 and Ghana Commercial Bank gained 2 percent to end at GH¢4.90 but had a bid at the close above the last selling price at GH¢4.91, last week it gained one percent.
The market seems to have weakened with just 8 stocks having bids at the end of trading, while there are 22 stocks with offers. The vast majority of the offer prices are the same as the last selling prices of the stocks, an indication of selling pressure.
Profits up 80% at Berger Jamaica
Berger Paints starts off the new earning season for the quarter to September with improved profit for the six months of $13 million, up 80 percent compared to $7.2 million for the same period in 2012 as sales rose 12 percent to $787.4 million. Importantly, revenues accelerated in the September quarter by 17.8 percent over that of 2012 compared to only a 5 percent increase in the first quarter.
Profit in the latest quarter was up by 76 percent to $16 million and augurs well for the all-important December quarter when it has the bulk of sales and profit.
Cash resources, which amounted to $130 million at the end of the March 2013 year end, is down to $33 million at the end of September. The bulk of the reduction went into working capital which rose from $512 million to $637 million excluding cash funds.
A dividend of 13 cents per share totalling $27.362 million was paid in July, 2013. Berger has no significant borrowed funds used to fund its operations.
If the present trend in revenues and margins continue, profit for 2014 should end up around 35 cent per share compared to 19 cents in 2013 to March. The problem with Berger is its strong reliance on the performance in the wider economy for growth. Right now that is not happening although there are signs of some pick up in the construction sector that the company could benefit from even as large amount of paints are sold for renovation of existing buildings than new start-ups.
Related posts | Economy pressuring Berger
Berger TT profit poised for big gain
The economies of Trinidad & Tobago and that of Jamaica are two contrasting ones. In the case of Trinidad, after a few years of decline the economy is growing again, albeit moderately. Jamaica on the other hand, is still experiencing decline. Interest rates, while sharply down in Jamaica at more than 6 percent, are nowhere near those of the Twin Island state with Treasury rates at less than 1 percent.
But a look at the results for Berger Paints in the two territories would make one wonder if the state of the economies aren’t the same. Both companies are struggling to maintain profitability as the construction sector suffered decline in both countries and are yet to be restored to health. In both countries, there are signs that things may be picking up. For example, Trinidad Cement reported improved sales in the first quarter this year over 2012. In the case of Berger Trinidad, there was a big improvement in the bottom line in the quarter to June with slight pickup in sales to $13.395 million versus $12.891 in 2012. Not much, but enough. This along with a cut in expenses to $13.52 million compared to $14 million, reduced the loss from $1.25 million before tax in 2012 to $185,000 this year and the after tax loss to $179,000 to June this year versus $973,000 in 2012. For the 12 months to March this year, on revenues of $64,146 million and expenses of $62,504 million, the paint company made a profit of $791,000 after tax.
According to figures released for the quarter to June, the company has eliminated some cost. This should made quite a difference to the full year results which IC Insider is forecasting to be 50 cents per share for the year to March 2014.
The price earnings ratio (PE) of the stock is low at just 7 times this year’s earnings, making it a good candidate for investors to profit from.
The financial position of the company is healthy, with working capital being more than two and a half times current assets to current liabilities. Equity capital stands at nearly $25 million with no major debt capital being used in funding its operations. There is virtually no cash on the balance sheet suggesting that they are using cheap bank financing to ensure shareholders max out on profits.
Insider call | Berger TT is an IC Insider Buy Rated stock.
Economy pressuring Berger
Berger Paints is reporting slightly higher profits for the year to March 2013. As it usually is the case, the final quarter profits are the lowest and in recent years the company makes a loss in the quarter. The loss made in the final quarter of the fiscal year was down on the same period in 2012, while profit before tax was actually up 8 percent at $14.9 million compared to $16.3 million, due purely to a cut in finance cost from $1.574 million to just $27,000 for the quarter. Revenues in the quarter fell 4 percent to $320 million. In 2012 revenues for the same quarter was $332 million. Uncertainty within the economy as Jamaicans awaited the outcome of the negotiation between the government and the IMF could have been a factor in the lower sales.
Revenues for the year climbed to $1.6 billion. However, the increase of 4.38 percent was not enough to offset cost. Profit before tax was down by $2.3 million as a result of the poor top line performance, while a lower tax bill resulted in profit after tax being up, but just about, with the company reporting $34.08 million versus $33.32 in 2012. The improvement was aided by a lower tax payment down from $16 million to $13 million and a boost by $9.8 million coming from a reduction in inventory obsolescence provision.
Stock outlook | Berger’s fortunes have declined considerably in the last 3 years. In the March 2011 financial year, revenues were $1.5 billion with profits of $67.8 million and it will take some doing to get sales up and get back to those profit levels. The price earnings ratio (PE) of the stock is high at 14 times earnings, even as return on equity, is paltry at 7 percent. The company would need to put in a very robust performance for the stock price to rally in light of the high valuation.
The financial position of the company is healthy, with working capital being more than twice current assets to current liabilities. The company recently announced a 13 cents dividend that is payable in July 9th this year.
Berger holds dividend, NCB cuts
Berger Paints Jamaica Limited | Advised that at a meeting of the Board of Directors held on April 24, 2013, the Directors passed a resolution that a Final Dividend payment of $0.13 per ordinary stock unit payable on July 9, 2013 be recommended to the stockholders on record as at June 21, 2013 in respect of the year ended March 31, 2013. The ex-dividend date is June 19, 2013.
Last year, the company paid dividends of a similar amount of $0.13 per share in July. This suggests that the profit to be reported for March 2013 is most likely flat.
National Commercial Bank | Declared a dividend of $0.16 per share payable on May 24. The ex-dividend date is May 8, 2013. The 2013 payment represents a decrease from $0.21 paid in May last year and is in keeping with an unpredictable dividend policy the company has been executing even after repeating a previously announced policy. The dividend payout ratio for the 2012 financial year to September amounted to 27% and for the 2011 financial year 25.7% compared to 42.2% for September 2010.
Dividend policy | As per the 2011 annual report: “The Board of Directors of National Commercial Bank recognizes the importance of capital in meeting the needs of shareholders, investors and the business. To this extent, a dividend pay-out rate has been determined.
“The Board of Directors will declare, at its discretion, dividends to shareholders. These dividends will be paid from the realised earnings of NCB. The dividends will be subject to a maximum of 50% of the ordinary realised profit earned each year and will be applied after taking account of all transfers. In the event that the pay-out is less than 50% in any one year, the Board of Directors reserves the right to increase future distributions proportionately. Further, the Board, at its discretion, may distribute to its shareholders the full amount of any and all realised gains arising from non-recurring or extraordinary transactions.
“The Dividend Policy is consistent with the Capital Management Plan and is reviewed annually or more or less frequently as determined by the Board of Directors.”
