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.