Shuffling of stocks in the TOP 10 list was quite pronounced this past week with two companies exiting and entering each list. Jetcon Corporation and CAC 2000 slipped out of the Junior Market TOP 10, and were replaced by Dolphin Cove and Lasco Financial.
Entering the TOP 10 main market list are Berger Paints, returning after a recent fall from the list and Grace Kennedy that dropped out previously.
In the main market of the Jamaica Stock Exchange, Scotia Investments earnings per share have been sharply reduced with the latest results for the half year showing no growth, with the stock falling off the TOP 10 list as a result, while Salada Foods price rose to $10, resulting in it being pushed off the list.
In trading last week, tTech demand is building while selling has eased with limited supply being shown in the market. Elsewhere, NCB Financial Group is hitching for a major breakout from a wedge formation.
As indicated in recent weeks, market movement continues to be constrained by near term resistance levels which is acting as short term restraint to a break out from current levels for the time being.
The average PE ratio for the Junior Market Top stocks is 7.4 and 7.2 in the main market, these compare favourably with 13.8 for the overall main market and 13 for Junior Market, based on 2017 estimated earnings. Several stocks are trading below the average, and have the potential for more gains for the rest of 2017, barring major negative developments.
In a number of cases, the TOP stocks will need to deliver results in the upcoming quarter in order to send a message that the potential they have will be manifested.
At the close of the week, IC Insider.com’s TOP 10 Junior Market stocks now trade at an average discount of 45 percent to the Junior Market average, while those in the main market are trading at a 48 percent discount, to the average of the market, leaving stocks with room for growth in the months ahead. At the end of April the reading was 35 percent discount for the juniors and 53 percent for the majors.
Express Catering heading for Junior Market
2017 is set to be the year with the most listing on the Jamaica Stock Exchange even as just four listings have made it to the market so far in 2017. At the end of 2016, eighteen new listings were expected based on feedback the stock exchange obtained from brokers and companies expressing an interest in listing.
Express Catering a company operating in the Montego Airport is being brokered by Mayberry Investments in a bid to raise funds for existing shareholders. The company shares are expected to be listed on the Junior Market of the Jamaica Stock Exchange. Existing shareholders plan to sell between 20 to 40 percent of the company to raise around $400 to $500 million at a price range between $1 and $2.50 per share, our source informs IC Insider.com.
The company would be valued around $1 billion and using a PE of 10 times earnings would put the profit at around $100 million. The bulk of passengers passing through the Montego Bay airport are tourist, with the continued increase in hotel rooms passenger traffic will keep growing for some time and provide the company with increased opportunity for growth.
Not much more has so far been disclosed, but an indication of the company’s size can be gleaned from the fact that Montego Bay Airport Ltd generated revenue from Express Catering for rental and commission on food and beverages sales of U$$2.7 million in for 2016, an increase from US$2.5 million in 2015.
In April this year The Gleaner reported that the company has annual revenues at US$14 million from being an exclusive provider of food and beverage products in the post-security lounge of the Sangster International Airport. The company has a diverse group of proprietary brands and international franchises to include such brands as Quiznos Subs and Salads, Aunt Annie’s Pretzels, Nathans Famous Hot Dogs, Cinnabon, Moe’s South Western Grill, Wendy’s, Dominos and Dairy Queen.
Elsewhere, the Musson’s subsidiary, Productive Business Solutions prospectus is said to be at the FSC for vetting, from about three weeks ago and should be close to being released to the public. Productive Business Solutions operates in the Caribbean, Central America and the USA and will come to the market with a US$41 million offer of ordinary shares. Stationery and Supplies Limited is also expected to be coming to the market anytime now.
Main Event flat profit before tax
Main Event Entertainment that went public with an IPO in January this year is reporting flat profit before tax and slightly lower net profit after tax of $3.3 million. Profit before tax for the year to October ended at $59.8 million com-pared to $60.3 million in 2015.
Profit after tax came in at $56.5 million versus $60 million in 2015, the out turn is lower than the $60 million the internal figures to September last year that was included in the prospectus showed. The net profit translates to earnings per share of just 23.5 cents with 240 million shares applicable at the date of the financials.
Return on average equity amounted to a strong 41 percent, with shareholders’ equity at the end of the period being $242 million.
The results emanated from a 9.5 percent rising in revenues to $1.13 billion, the growth was slowed b y a big drop in revenues from Digital Signage. With gross profit climbing 13 percent to $429 million. Expenses rose by 15.7 percent to $354 million. Revenue during the year was generated mostly by Entertainment promotion activities of $854.7 million in 2016 from $742.7 million in 2015. Audio and film contributed $189.5 million compared to $140 in 2015 and Digital signage of $88 million versus $151 million in 2015. The auditors signed off on their report on the 5th of June, an indication that all was not well with the financial reporting.
Main Event went public at $2 in January and now trades on the Junior Market of the Jamaica Stock Exchange at $6.50.
Sagicor Barbados undervalued but
The Barbadian based Sagicor Group is reporting net profit of US$23.4 million for the first three months of 2017, compared to the prior year of US$22.3 million. Profit flowed from revenues for the quarter of US$282.5 million, compared to US $264.4 million for the corresponding period in 2016, an increase of US$18.1 million.
Profit attributable to shareholders’ of the group ended at US$13.3 million, compared to US$13.9 million for the 2016 period. Earnings per common share was 4.4 US cents, compared to the prior year of 4.6 US cents.
Net premium revenue rose t0 US$167.7 million, exceeding the prior year amount of US$157.3 million. Net investment income and other income rose to US$114.8 million compared to the prior year’s US$107 million.
Operating expenses rose to US$115 million from US$101.4 million for the same period in 2016. “Higher administration costs were incurred as a result of the expansion of cards and payments business in our Jamaica segment, along with the incurrence of some non-recurring costs also relating to our Jamaica segment”, Stephen McNamara, Chairman, stated in his report to shareholders. Policy holders’ benefits inched to US$137.2 million from US$134 million for the previous year.
Total comprehensive income grew to US$28.6 million, compared to US$19.9 million for the same period last year. Included in comprehensive income were net gains on financial assets of US$7.9 million. “Retranslation losses Sagicor Group Jamaica, a subsidiary of the Barbados company.[/caption] amounted to US $0.7 million, compared to US $6.4 million reported in the prior year, and resulted from declines in the Jamaica and Trinidad currency against the United States dollar”, the Chairman stated.
Total assets amount to US $6.6 billion, with liabilities of US$5.8 billion and shareholders’ equity of US$818 million. The Group’s debt, which is included in other liabilities, was US$405.3 million.
The group’s stocks traded on the Trinidad and Tobago Stock Exchange atTT$8.99 and in Barbados at BD$2.45, (around US$1.30 per share. The price puts the PE ratio around 7 times 2017 earnings. The problem is that Barbados where the company is head quartered is in the midst of major economic problems that could make investing in the stock riskier than normal.
1 stock rise & 5 fall on TTSE
The market closed with 12 active securities compared to 18 on Thursday with 1 stock advancing, 5 declining and 6 holding firm. A total of 104,081 shares changed hands at a value of $6,914,298 compared to Thursday’s 610,096 shares valued at $3,541,855.
The Composite Index lost 0.91 points to 1,242.08, the All T&T Index fell 1.37 points to 1,827.95 and the Cross Listed Index was down 0.06 points to 87.99.
IC bid-offer Indicator|The Investor’s Choice bid-offer ended with 6 stocks with bids higher than last selling prices and 8 with lower offers.
Gains| Scotiabank closed at $59.01 with a 1 cent gain trading 226 shares.
Losses| Clico Investment traded at $22.50, losing 1 cent with 11,701 units changing hands, Guardian Holdings closed at $16, with a loss of 5 cents exchanging 17,669 shares, NCB Financial Group lost 2 cents with trades of 1,717 shares to close at $3.78, while Trinidad Cement was down 3 cents, closing at $4.17 with an exchange of 4,769 units and Trinidad & Tobago NGL closed 79 cents lower to $22.71 trading 3,362 shares.
Firm Trades| Angostura Holdings traded 1,000 units at $15.01, Guardian Media closed at $18.65 trading 3,224 units, JMMB Group held firm at $1.22 with 1,000 units changing owners, One Caribbean Media closed at $16.48 with an exchange of 1,505 shares. Sagicor Financial remained at $9.01 trading 10,200 units and West Indian Tobacco was unchanged at $127 trading 47,708 shares valued at $6,058,916.
Main Event doubles IPO price
The stock traded on the first day of listing, the 8th of February, at $2.61 but with just 100 units trading, with the next trade, taking place at $3.70 for 100 units. On Friday February the 10, 15,722,362 units traded with the price ending at $4.70 for a rise of 135 percent. Monday February 13, the stock closed trading at $.81 while trading 537,458 shares. On Tuesday the price slipped back to end at $4.51 as 757,244 shares changed hands. Wednesday saw trading in 696,685 shares be executed at $4.50, on Thursday 592,737 shares traded to close at $4.51 and 420,952 units traded on Friday to close at $4.80, to crown a successful two weeks for the stock that has gained 140 percent from the IPO price.
The stock which IC Insider.com project will earn around 35 cents per share in 2017, now trades at a PE of 14, with the junior market average now around 11.5, the upside from now will be challenging.