The Junior Market traded mostly at record territory for most of the trading session on Wednesday. A late pull back in the prices of Derrimon Trading and Indies Pharma pulled the index below the previous close.
The Junior Market Index declined by 9.14 points to close at 3,413.58 as trading ended with 26 securities compared to 25 on Wednesday plus 1 from the US dollar Junior Market on both days, leading to 7 advancing, 11 declining and 8 remaining unchanged. Investors exchanged 3,671,416 units valued at $14,989,400 compared to 2,560,907 units valued at $10,090,700 on Tuesday in the regular market and one in the US dollar segment.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 5 stocks ending with bids higher than their last selling prices, 4 closed with lower offers.
Trading closed with an average of 141,208 units for an average of $576,515 in contrast to 102,436 units for an average of $403,628 on Tuesday. 
Trading for the month to date averages 539,551 units for an average of $$3,204,213 and on the prior trading day, an average of 572,535 units for an average of $3,421,793. Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, AMG Packaging ended at $1.95, in trading 399,016 stock units, Blue Power concluded trading of 153,742 units, with a loss of 3 cents at $6.97 after trading at an intraday high of $7.50, CAC 2000 finished $1 higher at a 52 weeks’ high of $12, with 19,500 shares changing hands, Caribbean Cream ended trading of 6,250 shares and gained 64 cents to end at $7.90, Caribbean Producers closed at $6.10, trading 17,331 units. Derrimon Trading ended with a loss of 20 cents at $3, with 527,890 shares changing hands, Dolphin Cove concluded trading 1,300 shares at $17, Elite Diagnostic finished with a loss of 23 cents at $3.17, exchanging 5,000 stock units, Everything Fresh rose 2 cents in trading 21,000 shares to end at $2.02, Express Catering ended trading of 82,777 shares with a loss of 49 cents at $7.90. FosRich Group declined 1 cent to end at $3.20, trading 5,750 shares, Honey Bun ended with a loss of 10 cents at $4.15, with 1,800 units trading, 
Indies Pharma lost 17 cents and closed with 1,534,316 shares changing hands at $3.75, Jamaican Teas settled 25 cents higher at $4.65, with 13,767 shares, Jetcon Corporation ended at $4, trading 37,117 stock units. Key Insurance traded 446,525 units with a loss of 25 cents at $3.50, KLE Group finished trading 50,000 shares at $3, Knutsford Express closed with a loss of $1.20 at $11.50, with an exchange of 48,384 shares, Lasco Distributors ended with a loss of 5 cents at $3.95, with 2,000 shares changing hands. Lasco Financial concluded trading at $5.46, with 19,000 stock units, Lasco Manufacturing finished at $4, with an exchange of 13,000 units, Medical Disposables ended trading 3,740 shares with a loss of 70 cents at $6.10, Paramount Trading gained 40 cents to close at $3, with 91,400 shares traded. Stationery and Office finished trading 24 cents higher at $9.25, after 157,954 stock units were exchanged and tTech ended 10 cents higher at $6.10, with the trading of 3,857 shares. In the Junior Market US dollar market Eppley 5% us preference share traded 117 units with at $1.
Prices of securities trading for the day are those at which the last trade took place.
Record close for Junior Market – Tuesday
The Junior Market rose 20.24 points at the close of trading on Tuesday, to end at record close of 3,422.72 for a gain of more than 25 percent for the year to date.
Trading rose from 25 securities on Monday to 29 on Tuesday, leading to 13 advancing, 7 declining and 5 remaining unchanged, as investors exchanged 2,560,907 units valued at $10,090,700.compared to 2,777,946 units valued at $11,467,683 on Monday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 5 stocks ending with bids higher than their last selling prices, 5 closed with lower offers.
Trading closed with an average of 102,436 units for an average of $403,628 in contrast to 95,791 units for an average of $395,437 on Monday Trading for the month to date averages 572,535 units for an average of $3,421,793 and on the prior trading day, an average of 613,186 units for an average of $3,682,880. Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, AMG Packaging gained 5 cents to end at $1.95, with an exchange of 461,972 stock units, Blue Power concluded trading of 2,300 units 50 cents higher at $7, CAC 2000 finished $2 higher at record high of $11, with 11,761 shares changing hands, Caribbean Cream ended trading of 16,348 shares with a loss of 74 cents to end at $7.26, Caribbean Flavours lost 50 cents to close at $18.50, trading 7,423 stock units. Caribbean Producers finished trading 28,273 units at $6.10, Derrimon Trading ended 2 cents higher at $3.20, with 191,800 shares trading, Elite Diagnostic finished at $3.40, with 10,000 stock units changing hands, Everything Fresh shed 30 cents in trading 45,000 shares to end at $2, Express Catering ended trading 29,858 shares, 39 cents higher at $8.39. FosRich Group gained 20 cents to end at $3.21, exchanging 20,991 shares, General Accident finished trading 25,000 shares, to close 35 cents higher at $4.35, 
GWest Corporation closed 5 cents higher at $2.20, with 265,662 stock units changing hands, Honey Bun rose 20 cents higher to $4.25, with the trading of 6,519 units. Indies Pharma lost 2 cents and closed with 537,134 shares changing hands at $3.95, Iron Rock concluded trading of 10,000 shares at $4, Jamaican Teas settled with a loss of 20 cents at $4.40, with 44,845 shares changing hands, Jetcon Corporation ended trading 31,000 stock units after rising 4 cents to $4, Lasco Distributors ended at $4, exchanging 44,863 shares. Lasco Financial concluded trading 618,240 stock units with a loss of 14 cents to end at $5.46, Lasco Manufacturing finished 10 cents higher at $4, with 51,934 units changing hands, Main Event gained 10 cents to close at $5.30, with 8,000 shares trading and Stationery and Office finished trading of 36,984 stock units 1 cent higher at $9.01. In the junior market preference segment, Eppley 8.75% concluded trading of 25,000 units with a loss of 20 cents at $6.
Prices of securities trading for the day are those at which the last trade took place.
Record close for Junior Market – Monday
The Junior Market recorded gains of 5.39 points at the close of trading on Monday, to end at record close of 3,402.48, within 3 minutes of opening, to take out the old record of 3,392.58 on Monday.
Trading rose from 25 securities on Friday to 29 on Monday, leading to 7 advancing, 12 declining and 10 remaining unchanged, as investors exchanged 2,777,946 units valued at $11,467,683 compared to 2,279,431 units valued at $9,238,268 on Friday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 5 stocks ending with bids higher than their last selling prices, 2 closed with lower offers.
Trading closed with an average of 95,791 units for an average of $395,437 in contrast to 91,177 units for an average of $369,531 on Friday. Trading for the month to date averages 
613,186 units for an average of $3,682,880 and on the prior trading day, an average of 670,895 units for an average of $4,049,556. Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, AMG Packaging ended 1 cent higher at $1.90, with 186,246 stock units changing hands, Blue Power concluded trading at $6.50, trading 150 units, Caribbean Cream jumped to a 52 weeks’ high of $8 after gaining 50 cents and trading 58,059 shares, Caribbean Flavours traded 18,519 stock units with a loss of 30 cents at $19, Caribbean Producers finished trading at $6.10, with 12,934 units changing hands. Consolidated Bakeries traded 2,000 shares to close with a loss of 1 cent at $2.49, Derrimon Trading ended with a loss of 2 cents at $3.18, in exchanging 262,810 shares, Elite Diagnostic finished with a loss of 10 cents at $3.40, with 56,916 stock units being exchanged, Eppley settled with a loss of 5 cents at $10, trading 13,305 units. Everything Fresh shed 10 cents in trading 32,468 shares to end at $2.30, Express Catering ended trading 52,500 shares with a loss of 39 cents at $8, FosRich Group traded 32,340 shares 1 cent higher at $3.01, General Accident finished trading with a loss of 40 cents at $4, with 98,778 shares, GWest Corporation closed at $2.15, with 15,000 stock units. 
Honey Bun ended at $4.05, with 25,386 units, Indies Pharma lost 5 cents and closed with 1,098,497 shares changing hands at $3.95. Iron Rock concluded trading of 81,500 shares for 50 cents higher at $4, Jamaican Teas settled with a loss of 5 cents at $4.60, exchanging 38,064 shares, Jetcon Corporation gained 6 cents to close at $3.96, with 250 stock units changing hands. KLE Group finished trading 91,858 shares at $3, Knutsford Express closed $1.20 higher at $12.70, exchanging 1,800 shares, Lasco Distributors ended at $4, with 32,479 shares, Lasco Financial gained 10 cents to $5.60, trading 110,888 stock units. Lasco Manufacturing finished at $3.90, with 6,289 units, Main Event settled with a loss of 1.80 cents at $5.20, in the exchange of 14,000 shares, Stationery and Office finished trading 15,900 stock units at $9 and tTech ended at $6, changing 309,410 shares. In the junior market preference segment, Derrimon Trading ended with a loss of 26 cents at $2.25, with 5,100 stock units changing hands.
Prices of securities trading for the day are those at which the last trade took place.
New record for Junior Market – Friday
The Junior Market recorded gains of 31.89 points at the close of trading on Friday, to end at record close of 3,397.09 after it traded briefly at an intraday record high of 3,408.31 points, within 3 minutes of opening, to take out the old record of 3,392.58 on Monday.
The number of securities trading remained the same as Thursday at 25 and leading to 9 advancing, 2 declining and 14 remaining unchanged, as investors exchanged 2,279,431 units valued at $9,238,268, compared to 2,749,388 units valued at $12,888,595 on Thursday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 5 stocks ending with bids higher than their last selling prices, 4 closed with lower offers.
Trading closed with an average of 91,177 units for an average of $369,531 in contrast to 109,976 units for an average of $515,544 on Thursday Trading for the month to date averages 670,895 units for an average of $4,049,556 and on the prior trading day, an average of 732,567 units for an average of $4,441,049. 
Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, Access Financial closed at $50, with 4,500 shares changing hands, AMG Packaging ended at $1.89, in exchanging 44,970 stock units, Blue Power concluded trading of 39,707 units, at $6.50, Caribbean Cream ended trading 40 cents higher at $7.50, with 18,100 shares changing hands, Caribbean Producers rose 10 cents to $6.10, with the trading of 4,431 units. Consolidated Bakeries closed 5 cents higher at $2.50, with 56,500 shares changing hands, Derrimon Trading added 20 cents to close at $3.20, with 384,647 shares changing hands, Dolphin Cove concluded trading of 7,200 shares at $17, Elite Diagnostic finished at $3.50, with 106,043 stock units trading, Everything Fresh gained 30 cents in trading 69,825 shares to end at $2.40, Express Catering ended trading 33,999 shares, 21 cents higher at $8.39, FosRich Group traded at $3, with an exchange of 13,572 shares, 
GWest Corporation closed at $2.15, with 31,044 stock units trading, Indies Pharma closed with 1,012,184 shares changing hands to close of $4, Jamaican Teas settled at $4.65, trading 37,374 shares. Jetcon Corporation ended trading 20,677 stock units with a loss of 10 cents at $3.90, Knutsford Express closed at $11.50, with 500 shares changing hands, Lasco Distributors ended 23 cents higher at $4, after 15,470 shares traded, Lasco Financial concluded trading 133,305 stock units with a gain of 5 cents to $5.50. Lasco Manufacturing finished at $3.90, with 19,158 units changing hands, Main Event settled $1 higher at $7, with 68,715 shares changing hands, Medical Disposables ended trading 18,135 shares with a loss of $1.15 at $6.80, Paramount Trading traded 106,383 shares at $2.60 and Stationery and Office finished trading at $9, with 15,339 stock units being exchanged.
Prices of securities trading for the day are those at which the last trade took place.
More retreating for Junior Market
The Junior Market retreated from the record close when trading resumed on Tuesday, with the market index declining by 12.75 points to close at 3,356.37, back below the previous high of 2017.
Trading resulted in 25 securities, the same number that changed hands on Monday, leading to 12 advancing, 5 declining and 8 remaining unchanged.
Indies Pharma was the only security that closed at record high on Wednesday as investors exchanged 3,271,099 units valued at $12,971,060 in the overall market, compared to 2,700,219 units valued at $10,803,399 on Tuesday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 7 stocks ending with bids higher than their last selling prices, 2 closed with lower offers.
Trading closed with an average of 130,844 units for an average of $518,842 in contrast to 108,009 units for an average of $432,136 on Tuesday. Trading for the month to date averages 806,685 units for an average of $4,908,371 and on the prior trading day, an average of 898,015 units for an average of $5,501,550. 
Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, Access Financial closed $1.50 higher at $47.50, in exchanging 1,019 shares, Blue Power concluded trading of 32,929 units, 25 cents higher at $6, CAC 2000 finished of 7,000 shares at $9, Caribbean Flavours traded just 164 stock units, with a loss of 57 cents to $19.30, Caribbean Producers closed at $6, after exchanging 107,764 units. Consolidated Bakeries closed 5 cents higher at $2.50, with 100,000 shares changing hands, Derrimon Trading ended at $3, with an exchange of 815,062 shares, Elite Diagnostic finished 28 cents higher at $3.44, with 33,983 stock units trading, Everything Fresh gained 1 cent in trading 52,166 shares to end at $2.44, Express Catering ended trading at $8.18, with 160,774 shares changing hands. FosRich Group traded 15 cents higher at $3.05, with an exchange 127,726 shares, General Accident closed 15 cents higher at $4.40, trading 22,360 shares, Honey Bun ended 10 cents higher at $4, with 39,029 units, Indies Pharma gained 5 cents with 958,728 shares changing hands to end at a record close of $3.65,
Iron Rock concluded trading 30 cents higher at $3.50, with an exchange of 106,550 shares. Jetcon Corporation ended trading 300 stock units at $3.95, Knutsford Express closed at $11.50, in the swapping of 800 shares, Lasco Distributors ended with a loss of 5 cents at $4, with 363,914 shares changing hands, Lasco Financial concluded trading 13 cents higher at $5.90, after 110,176 stock units traded. Lasco Manufacturing finished with a loss of 2 cents at $3.99, with 36,000 units, Main Event settled with a loss of 4 cents at $5.98, trading 134,500 shares, Medical Disposables ended trading at $6.70, with 6,500 shares, Paramount Trading ended with a loss of 15 cents at $2.60, with 33,655 shares changing hands and Stationery and Office finished trading 29 cents higher at $8.99, with 10,000 stock units. In the Junior Market preference segment, Eppley 9.5% finished at $6, with 10,000 shares trading.
Prices of securities trading for the day are those at which the last trade took place.
Just 1 new addition to IC TOP 10
The bullishness continued on Jamaica Stock Exchange, driving the main market to more record highs and hitting more than 352,000 points on Friday, while the Junior Market traded at a 15 months’ high.
Half year earnings season is almost over with only Jamaica Broilers and Scotia Group left to report for the main market. Some results were excellent and most were okay, confirming what was already telegraphed to investors by earlier results. Regardless, with interest rates now under 2 percent for short term government and the central bank’s instruments, the bull market is clearly on. The chronic shortage of many of the stocks continue to put upward pressure on prices and moving the PE ratios higher as well.
Medical Disposables is the only new addition this week, to the TOP 10 coming at the expenses of FosRich Group as the price of the former, dropped to $5.10 from $6.40 at the end of the past week. 
General Accident has been at the top of the Junior Market list for a long time, enjoyed a bounce in the price to $3.80 by the end of the week, helped by half year results that showed profit rising from $8 million in 2017 to $95 million in the half year, with the quarter up from a loss of $9 million to a profit of $66 after tax. IC Insider.com also down graded earnings for the full year to 45 cents per share and the stock now sits at 6th spot in the list. The PE is just 8.4 and will go higher.
The PE ratio for Junior Market Top stocks averages 8.4 up from 7.9 last week, as the market continues to revalue the multiple higher. The latest valuation compares to an average PE for the overall market of 13, based on 2018 estimated earnings.The main market PE is now 8 for the top stocks, compared to a market average of 13.5, a good indicator of the level of undervaluation of these stocks.
Work done by IC Insider.com suggests that the PE ratio is likely to end 2018 around 16 or 17 times earnings, as investors continue to gradually upgrade the multiple they are prepared to pay for stocks, which would lift prices sharply over the next several months from current levels. In addition, the latest Treasury bill offer saw rates dropping to 1.7 percent on the 91 days instrument and 1.88 percent on the 182 days instrument. These rates suggest more funds will be going into stocks as liquidity remains high.
The TOP 10 stocks now trade at an average discount of 35 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 40 percent to the market.
TOP 10 stocks are likely to deliver the best returns within a 12 months period. Stocks are selected based on projected earnings for each company’s current fiscal year. 
Based on an assumed PE for each, the likely gains are determined and then ranked, with the stocks with the highest potential gains ranked first followed by the rest, in descending order. Potential values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Earnings per share are revised on an ongoing basis based on new information received that can result in changes in and out of the list as well.
Good news push TOP 10 stocks
There were no new entrants this past week, to the TOP 10 list of stocks on the Jamaican Stock Exchange, but there was some good news with the acquisition by Stationery and Office Supplies of a book making business.
The acquisition is set to add to profit in year one, and investors responded by driving the stock to a new high. The stock that was facing some challenge to get bids around the $5.50 level, the stock traded at in the past few weeks, jumped to $6 on the same day the announcement was made. With annual sales estimated around $130 million that could rise with greater focus on the operations and more capital available to support it, IC Insder.com has up graded the earnings to 90 cents for this year. The company is one of a number of Junior Market listings expected to post positive gains in the 2018 first quart over that of 2017.
The other good news for the market was a further fall in Treasury bill rates and another month of slightly negative inflation for March with the first quarter inflation also being negative. While the main market hit two new record highs during the week. While the JSE main market is caught up in a wedge formation and waiting for a big break out which could happen any time, the Junior Market that was in a downward drift from late 2017 now seems to have support from the 200 day and 120 day moving averages with the short term moving average now above both longer term ones. The market is being steered by two support lines with one going back to 2010 and another going back to early 2014.
Investors pressured recently listed Elite Diagnostic during the week as they reacted negatively to the December quarter results with lower profit that the previous year’s results. 
Investors seemed to have responded the Berger Paints bullish reading in the annual report as they bought the stock in increasing volumes during the week, leaving the price at $19. The Managing Director had reported that “the outlook for 2018 and beyond is extremely positive. The Berger brand remains strong and continues to dominate the local market with strong brand equity and a reputation for quality. With GDP projected to grow by at least 1.5% in 2018, construction activity and the demand for coatings is expected to remain relatively strong for the next two to three years. Plans are already being implemented to expand the company’s local distribution and product range as well as to improve our level of customer service and responsiveness. In 2018, there will also be greater emphasis on building out exports by targeting new markets in Central America and the Greater CARICOM region.”
Palace Amusement continues to enjoy expanded interest from investors with the continued success of the movie Black Panther. 
After more than two months of showing it still has two showings per day in all three cinemas, but the attraction for the stock is much more than this movie.
Strong buying came in for Barita Investments at $9.50 during the week. JMMB Group gained more ground, as the block out period for insiders to trade in the stock closes and the stock moved up to $28.32, resistance is just over $31 an area investors should be on the lookout for in the short run.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6 compared to an average PE for the overall main market of 10 based on 2018 estimated earnings. The main market PE remains at 7 for the top stocks, compared to a market average of 12.7.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 40 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 42 percent to the market.
$11M missing from elite figures
$11 million are missing from the first quarter figures included in Elite Diagnostic prospectus to raise $141 million in an IPO.
While the 2017 audited accounts show depreciation and amortization of $28 million and administrative expenses of $81 million,the interim figures show no amount for depreciation, with administrative cost of $24 million which is just over 25 percent of the full years cost to June. Direct cost is $87 million for the fiscal year or just under $22 million per quarter, in line with $21.7 million in the September quarter. The conclusion is that the cost of depreciation is not included and would result in profits falling from $23 million reported to $14 million and would reduce the expected full year earnings below the annualized figure of $92 million down to a much lower amount, assuming that the new location at Old Hope Road just break even.
Elite Diagnostics is the first 2018 IPO out of 9, that is expected this year.
The intrigue does not end there. The movements in fixed assets show a missing $11 million, with fixed assets at June being $187 million and the cash flow statement showing additions of $71 million, that should result in a total of $257 million which would be reduced by approximately $9 million for depreciation for the quarter, bringing the net figure to $249 million but the interim figures have fixed assets at $238 million. For short, a material amount of $11 million is missing and it is unclear what items are under or over stated.
On the face of it, the reported profit for both years appear overstated, on that basis, IC Insider.com reduced earnings per share for the full year to 20 cents, with the stock being priced at 10 times earnings, but that still leaves the stock a buy.
