In trading on the Jamaica Stock Exchange Junior Market on Tuesday, newly listed EduFocal moved from its IPO price of $1 to close at $1.32 on the first day of trading, while JFP Limited continued from its opening price on Monday to $1.68 at the close on Tuesday and helped maintained the volume of stocks and the value traded moderately above that on Monday.
Market activity led to 43 securities trading compared to 42 on Monday and ended with 14 rising, 18 declining and 11 closing unchanged.At the close, the Junior Market Index shed 38.05 points to settle at 3,995.43.
The PE Ratio, the most used measure to compute stock values, averages 19.9. The PE ratios in the chart below are based on ICInsider.com earnings forecast for companies with financial years to August 2022.
Overall, 21,910,635 shares traded for $55,555,327 versus 19,487,231 units at $50,742,595 on the Monday. JFP Limited led trading with 13.15 million shares for 60 percent of total volume followed by Lumber Depot with 2.77 million units for 12.6 percent of the day’s trade, Jamaican Teas ended with 2.22 million units for 10.1 percent market share and Future Energy Source ended with 1.44 million units changing hands for 6.6 percent market share.
Trading averaged 509,550 shares at $1,291,984 compared to 463,982 shares at $1,208,157 on Monday and month to date, averaging 510,084 units at $2,249,855, compared to 510,146 units at $2,360,875 on the prior day. February closed with an average of 370,064 units at $1,402,517.
Investor’s Choice bid-offer indicator shows two stocks ended with bids higher than their last selling prices and one with a lower offer.
At the close, Access Financial dropped $1.51 in closing at $18 after 51,516 shares changed hands, AMG Packaging rose 20 cents to $3.20 while exchanging 3,180 stocks, Cargo Handlers fell $1.50 to end at $9.10, trading 12,219 stock units. Dolphin Cove declined $1.10 to close at $22.90, with 24,692 units crossing the market, EduFocal increased 32 cents to $1.32, with 9,662 shares clearing the market, Everything Fresh popped 11 cents to $1.21, with 366 stocks crossing the market. Express Catering lost 29 cents in closing at $4.88 in exchanging 4,100 units, Fontana advanced 27 cents to close at $9.78, with 14,711 stock units changing hands, Fosrich shed 48 cents to end at $17 with 10,057 units crossing the exchange. 
Honey Bun fell 20 cents to end at $8.90 after exchanging 2,447 stocks, Jamaican Teas dropped 33 cents to close at $3.17 with an exchange of 2,220,989 shares, JFP Limited rallied 37 cents in closing at $1.68 after exchanging 13,153,656 stock units. Lasco Distributors bounced 24 cents to $3.79 in switching ownership of 95,474 units, Lasco Financial declined 10 cents to $3.45 in an exchange of 12,500 shares, Lasco Manufacturing lost 17 cents to end at $4.33 trading 95,149 stock units. Lumber Depot shed 66 cents to close at $3.28 in trading 2,771,346 stocks, Main Event fell 20 cents to $6.90 with the swapping of 21,457 stocks and Paramount Trading shed 12 cents to $1.70 with 30,147 stock units. Changing hands.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
Edufocal jumps 31% on first day trading on Junior Market
Shares of EduFocal were listed on the Jamaica Stock Exchange on Tuesday following the recent initial public offer of shares following the listing of JFP Limited on Monday. Edufocal hit the maximum of $1.32 for the day with a small number of shares trading, with nearly 33 million on the bid at the close, while JFP climbed to $1.68, up 68 percent from the IPO price of $1.
The Combined Index dived 3,528.93 points to 397,355.68, the All Jamaican Composite Index declined 4,236.02 points to 434,185.95, the JSE Main Index dropped 3,408.49 points to end at 386,530.80 while the Junior Market Index dropped 38.05 points to settle at 3,995.43.
The market’s PE ratio ended at 20.7 based on 2021-22 earnings and 12.8 times those for 2022-23 at the close of the Jamaica Stock Exchange.
Investors need a series of measures and pertinent information to successfully navigate the many investment choices in the local stock market. The ICInsider.com PE ratio chart along with the more detailed daily report charts, provide investors with regularly updated information to help with decision making.
Investors should make use of the chart to help make rational investment decisions, by investing in stocks that are close to the average for the sector and not going too far from it, unless there are compelling reasons to do so. Investors who buy when the price of a stock is close to the average will find that they are not inclined to overpay for a stock. This approach helps to take emotions out of the investment decision and put in on fundamentals while at the same time not being too far from the majority of investors.
The ICInsider.com PE Ratio chart covers all ordinary shares listed on the Jamaica Stock Exchange and shows companies grouped on an industry basis, allowing for easy comparisons between same sector companies as well as the overall market.
The net asset value of each company is reported as a guide to easily assess the value of stocks based on this measure. The chart also shows daily changes in stock prices and the percentage year to date price movement based on the last traded prices. Dividends payable and yields for each company are shown in the Main and Junior Markets’ daily report charts that show closing volume for the bids and offers.
The EPS & PE ratios are based on 2021 and 2022 actual or projected earnings, excluding major one off items. The PE Ratio is the most popular measure used to determine the value of stocks.
JFP lists on Monday
Trading of shares that were recently offered to the public in JFP Limited, will commence on Monday on the Junior Market of the Jamaica Stock Exchange and bring the total listings on the market to 44 and will move to 45 on Tuesday after the listing of Edufocal.
A total of 280 million ordinary shares were offered to the public with the issuing opening on February 21 and closed the offer being oversubscribed.
JFP production
Employee Reserve Pool applicants received 100 percent of their application with the balance not applied for was made available for Key Partner Reserve Pool who received all they applied for. GK Investments Reserve Pool applicants got all shares applied for, applicants from the General Public got 12,500 shares plus approximately 22.8 percent of the excess shares applied for above the Base Allotment. The oversubscription should provide a bounce for the stock when it opens.
Edufocal lists on Tuesday
Trading of shares in EduFocal that offered 129,689,219 ordinary shares to the public on March 3, will commence on Tuesday as the company shares will be listed on the Jamaica Stock Exchange Junior Market on that day and will bring the total listings on the market to 45.
The offer was oversubscribed, with Key Strategic Partners in this reserved pool will receive all their predetermined amount.
Applicants who applied for more than their predetermined amount will receive a pro-rata allocation of approximately 59.67 percent of the excess shares for which they applied, with any excess transferred to the General Public Pool.
All applicants from the General Public received 10,000 shares and approximately 16.57 percent of the excess shares.
Although the offer was handily oversubscribed, ICInsider.com gathers there were applications that came in after the close just after the issue opened and closed minutes after opening so there is added demand that should provide a bounce for the stock.
Tropical drops ICTOP10 with 32% rise
Last week Tropical Battery surged right to the top of the ICTOP10 Junior Market listing with the company seems poised to earn $280 million for the current year, with earnings per share of 22 cents. Investors who pounced on the stock immediately after the release of the first quarter results before the price pulled, drive the price up in the holiday shortened week to close with a 32 percent gain at $2.30.
In a week when the Junior Market came back to life to close at a new record high on Friday, following a new record on Thursday, the market index closed on Friday over the 4,100 mark for the first time and ended at 4,168.16, with a 21.6 percent gain for the year to date. At the same time, the Main Market continues to consolidate around the 440,000 points level, on the All Jamaica Composite Index.
The EduFocal initial public offer to raise $130 million at $1 per share, opened and closed on Thursday morning, ICInsider.com was informed that preliminary data suggests that the offer attracted around twice the amount on offer, resulting in the early closure. Elsewhere, the Jamaica Stock Exchange is enjoying robust business in 2022 over 2021, which should deliver a big bump in revenues and profit for 2022 should the trend holds, accordingly, ICInsider.com now puts 2022 earnings for the first quarter above the 2021 full year’s earnings of 71 cents, with a possible $3 per share for the full year. Watch this one.
In TOP10 developments this week, returning to the Junior Market are Cargo Handlers with the price holding at $8.99 and Medical Disposables after the price slipped from $7.27 to $6.60 this week. Dropping out of the TOP10 this week are Caribbean Assurance Brokers with the price falling 23 percent to $2.50 as investors dumped the shares after the company reported a 47 percent increase in profit to 21 cents per share, but vastly down on the 33 cents per share reported in the nine months to September. The Main Market had three changes, with Caribbean Producers and Carreras returning to the Top10 to be joined for the first time by Transjamaican Highway and out goes Berger Paints, Jamaica Broilers and Sagicor Group.
During the week, the Junior Market TOP10 listed AMG Packaging fell 8 percent to $3.14 and in the Main Market, Proven Investments rose 9 percent followed by Berger Paints 6 percent and a 4 percent fall for Jamaica Broilers, but Guardian Holdings and Sagicor Group fell 5 percent
The Junior Market potential gains for the TOP 10 Junior Market stocks moved from 113 percent to 105 percent much lower than the Main Market at 124 percent. The top three stocks in the Junior Market are Elite Diagnostic followed by AMG Packaging and Lasco Distributors to gain between 121 and 126 percent, compared to 120 and 153 percent, previously.
The potential gains for Main Market stocks moved from 125 percent last week to this weeks’ 124 percent, with the top three being Guardian Holdings followed by JMMB Group and Sygnus Credit Investments all projected to gain between 161 and 193 percent versus 161 and 180 percent last week.
The average PE for Junior Market has surpassed the average of 17 times 2020 earnings achieved at the end of March last year in moving to 19.2 based on ICInsider.com’s 2021-22 earnings and is ahead of the JSE Main Market at 16.1. The TOP 10 stocks trade at a PE of a mere 9.8, with a 49 percent discount to that market’s average.
All the stocks in the Junior Market can gain just 4 percent to the end of March this year, based on an average PE of 20. About a third of Junior Market stocks with positive earnings
are trading at or above this level, averaging around 23.
The average PE for the JSE Main Market is 16.1 just 18 percent less than the PE of 19 at the end of March and 24 percent below the target of 20 to the end of March this year. The Main Market TOP 10 average PE is 9.2 representing a 43 percent discount to the market, well below the potential of 20. Around 15 stocks or a thirty 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. The depressed PE of the main market may be indicating that bigger investors are reluctant to be aggressive in buying into the market currently with inflation, rising interest rates and war populating the headlines.
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.
EduFocal IPO closed
EduFocal Limited offer of 129,689,219 Ordinary Shares to the public at $1 each that opened on March 3, 2022, has closed well ahead of the scheduled date of March 17, as was expected word emanating from the company indicates, with the issue attracting almost twice the amount that was on offer when it closed just seconds after the 9 o’clock opening.
The Company intends to apply to the Jamaica Stock Exchange for admission of the shares on the Junior Market and will bring the total listings on that market to 45.
The company experienced rapid growth with revenues of $27 million in 2019 rising to $103 million in 2020 and profit before tax of $15.6 million. For the period to September 2021 revenues rose 39 percent to $107.6 million with a loss of less than a million dollars, from $77.5 million in revenues and a small profit of $7.5 million before tax. Preliminary results to December 2021 saw revenues rising to $168.6 million with a profit of $15 million or 2.8 cents per share, putting the PE ratio around 36 times 2021 earnings.
The company is projecting revenues rising to $322 million in 2022 and $355 million in 2023, with profits of $50 million and $69 million respectively. The projected revenues for 2022 would result in growth of 91 percent, well above the December quarter revenues annualized of around $240 million. The forecasted profit appears reasonable if the performance in the December quarter carries over for the rest of 2022 and would represent earnings per share of 8 cents with a PE of 12.
EduFocal Learn encompasses the Company’s core business offering which is focused on providing a social learning platform that combines study with play, with the primary offering, focused on test preparation for Jamaica’s Primary Exit Profile exams, previously known as the Grade Six Achievement Test (GSAT). In September 2020, the Company launched the EduFocal Academy product which entailed a full-day learning programme.
The proceeds of the offer will be used to pay transaction costs of $12 million, $42 million will be used towards the repayment of short term debt and approximately $62 will be used towards expansion in new markets.
The company is involved in online education, relatively new business activity as such the risk associated with an investment in these shares may be higher than for long established businesses in tried and proven segments of the economy.
EduFocal attractive based on 2022 earnings
EduFocal Limited is offering 129,689,219 ordinary shares to the public at $1 each with the issue opening on March 3, 2022, with the closing scheduled for March 17, but is expected to close earlier.
Only 80,499,272 Ordinary Shares will be available to the general public as 49,189,947 are reserved for Key Strategic Partners and a Lender who agreed to convert a loan into equity.
The Company intends to apply to the Jamaica Stock Exchange for admission of the shares on the Junior Market and will bring the total listings on that market to 45 if the issue is successful.
The company experienced rapid growth with revenues of $27 million in 2019 rising to $103 million in 2020 and profit before tax of $15.6 million. For the period to September 2021 revenues rose 39 percent to $107.6 million with a loss of less than a million dollars, from $77.5 million in revenues and a small profit of $7.5 million before tax. Preliminary results to December 2021 saw revenues rising to $168.6 million with a profit of $15 million or 2.8 cents per share, putting the PE ratio around 36 times 2021 earnings.
The company is projecting revenues rising to $322 million in 2022 and $355 million in 2023, with profits of $50 million and $69 million respectively. The projected revenues for 2022 would equate to growth of 91 percent, well above the December quarter revenues annualized of around $240 million. The forecasted profit appears reasonable if the performance in the December quarter carries over for the rest of 2022 and would represent earnings per share of 8 cents with a PE of 12.
The company had shareholders’ equity of $71 million, with borrowings of $114 million. Current assets stood at $138 million and includes cash of $17 million and a high degree of receivables of $114 million. Payables amount to $24 million at the same time.
The Company commenced operations in March 2012 and has two divisions, Learn and Business. Under the Learn division, the Company provides educational technology in the Business to Consumer space and more recently via the Business division, it offers Business to Business solutions.
EduFocal Learn encompasses the Company’s core business offering which is focused on providing a social learning platform that combines study with play, with the primary offering, focused on test preparation for Jamaica’s Primary Exit Profile exams, previously known as the Grade Six Achievement Test (GSAT). In September 2020, the Company launched the EduFocal Academy product which entailed a full-day learning programme.
The Company’s content is delivered over its proprietary e-learning platform, for which it charges monthly subscription fees. EduFocal Business division was launched in 2020. It is focused on delivering organisation or industry specific e-learning content using the Company’s platform architecture and know-how.
The proceeds of the offer will be used to pay transaction costs of $12 million, $42 million will be used towards the repayment of short term debt and approximately $62 will be used towards expansion in new markets.
The company is involved in online education, relatively new business activity as such the risk associated with an investment in these shares may be higher than for longer established businesses in tried and proven segments of the economy.
The directors are Peter Levy, chairman, Shauna Fuller Clarke, Lloyd Swaby Gordon Swaby, Grace Lindo and Kevin Donaldson
IPO gifts for Christmas and early New Year
The current year 2021 has not been a bumper one for initial public offerings in Jamaica, all of that could change as Santa has one or two gifts on his sleigh to deliver either a few days before Christmas or just after.
Word on the street is that investors should save some of the money earmarked for Christmas gifts and prepare for two Initial Public offerings that could hit the road ahead of Christmas and just ahead of the New Year.
The year is closing fast saw one outstanding offer returning a bid payoff for investors as the Junior Market listed Future Energy Source there were a few in the Main market but they failed to generate any excitement for investors.
ICInsider.com previously reported that the initial public offer of shares in Jamaica Fibreglass Products is expected to come to the Jamaican capital market in October, our source advises, with Spur Tree Spices to come shortly after. We said then that, “Jamaica Fibreglass Products produces fiberglass-based furniture and beddings, with revenues said to be in the region of $600 million, is expected to raise approximately $250 million for expansion purposes. The prospectus of the Metry Seaga-owned company is said to be at an advanced stage of preparation and should be moving through the various stages for approval soon.”
“Spur Tree Spices, with revenues, said to be just over $1 billion, should also be coming in October, if all goes well, intending to pull in $250 million. GK Capital are brokers of the two issues that are slated to list on the Junior Market.”
Various issues seem to have delayed both of the above but the various issue may have been dealt with and the runway is said to be cleared for flights to take off sooner than later.
These two are not the only ones coming. Word is that Mayberry Investments has a few potential IPOs with one or two at advanced stages of readiness to hit the market in 2022. IC Insider.com gathers that one is an IPO to raise around $200 million in the educational line of business and one is for an existing listed company for a fresh capital raise. There are some regulatory issues regarding the structure of reserve shares for the initial public issue, with the FSC is now proposing that the vast majority of an issue must be made to the general public, thus severely limiting the percentage that can be kept for select clients. It is a move intended to squelch the many concerns of investors of being shut out of getting reasonable amounts of issues.
In October this year, the social learning portal Edufocal disclosed that they signed an agreement to engage Mayberry Investments in a move to raise capital. ICInsider.com gathers that the effort will likely bear fruit early in the New Year. The government of Jamaica’s intention to divest their 20 percent holding in JPS is at a fairly advanced stage and could be early in 2022, but that investment could be fraught with potential dynamite for small investors.
Keep watch, they all could be closer than you think.