The Junior Market recorded strong gains in the market index at the close of the Jamaica Stock Exchange on Monday, with the Junior Market Index jumping 48.55 points to 3,714.30 even as the volume of stocks traded declined 54 percent with the value down 58 percent lower than on Friday after trading in 47 securities compared with 45 on Friday and ended with 19 rising, 18 declining and 10 closing unchanged.
Investors traded 5,812,729 shares for $12,880,143 down from 12,592,410 units at $30,723,595 on Friday.
Trading averaged 123,675 shares at $274,046, compared with 279,831 shares at $682,747 on Friday, with the month to date, averaging 346,614 stock units at $4,661,588 compared to 376,466 units at $5,249,094 on the previous trading day. March closed with an average of 509,288 units at $1,071,868.
ONE on ONE Educational led trading with 1.93 million shares for 33.2 percent of total volume, following release of half year’s results showing increased revenues of 47 percent and profit before tax jumping 122 percent, but with slightly lower profits in the second quarter compared with 2022 as administrative cost jumped 51.6 percent in the quarter. Lumber Depot followed with 678,357 units for 11.7 percent of the day’s trade and JFP Ltd ended with 661,320 units for 11.4 percent market share.
The PE Ratio, a measure of computing appropriate stock values, averages 11.2. The PE ratios of Junior Market stocks are computed using the last traded stock price in conjunction with ICInsider.com’s earnings projections for the financial years ending between November 2023 and August 2024.
Investor’s Choice bid-offer indicator shows six stocks ended with bids higher than their last selling prices and seven with lower offers.
At the close, Access Financial dropped 96 cents to $24.02, with 56 shares changing hands, AMG Packaging dipped 10 cents in ending at $2.65 with 600 units clearing the market, Derrimon Trading shed 7 cents to $2.05 in an exchange of 88,953 stocks, EduFocal fell 20 cents to $2.03 in exchanging 3,702 stock units, Express Catering increased 75 cents to close at $5.75 with a transfer of just 2,308 shares, Fontana declined 9 cents to end at $8.10, with 69,877 stocks crossing the market, Future Energy Source climbed 7 cents in closing at $4.17 with the swapping of 124,884 units, Honey Bun gained 19 cents to close at $6.30 after trading 81,172 stock units, Indies Pharma rallied 23 cents in ending at $3.33 after a transfer of 31 units, ISP Finance lost $1.69 to close at $19.51 after 1,510 shares passed through the market, KLE Group declined 25 cents to end at $1.70 as investors exchanged 15,173 stocks, Knutsford Express fell 50 cents in closing at $11 with investors trading 23,143 stock units, Lasco Distributors popped 41 cents after ending at $2.58 with an exchange of 105,353 stock units, Lasco Financial rose 10 cents to $2.50, with 6,358 shares crossing the market, Lasco Manufacturing advanced 19 cents to close at $4.30 in trading 10,118 units, Limners and Bards increased 13 cents to close at $2.34 with 50 stocks crossing the exchange, Lumber Depot climbed 27 cents to end at $2.50 closed with an exchange of 678,357 stocks, Main Event rallied 10 cents to $13.05 in an exchange of 35,706 units, Spur Tree Spices shed 7 cents in ending at $2.63 after an exchange of 88,262 shares and Stationery and Office Supplies dropped 70 cents in closing at $14.30 after switching ownership of 150 stock units.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
Honey Bun in ICTOP10 as Purity jumps 24%
The Main Market of the Jamaica Stock Exchange recorded solid gains during the past week as the Junior Market declined but that did not show up in the ICTOP10 stocks performance as Junior Market stocks ended with gains and losses with the average gains outdoing declines while the Main Market ended with modest price changes in a week when Consolidated Bakeries (Purity) was the star performer with a 24 percent rise to $2.50.
The Junior Market had one change in the TOP10 as Main Event rose 6 percent to $12.95 and moved out of the TOP10, allowing Honey Bun to return after falling out the previous week.
Other major price movements in this past week were a 4 percent rise for Everything Fresh to $1.46, a 17 percent fall to $2.15 for Lasco Distributors and 4 percent decline for Image Plus to $1.95. Trading in Image Plus never resulted in more gains during the week following the previous week’s healthy move as selling continued at the same pace as the week before while buyers seem to have pulled back.
In the Main Market, Key Insurance rose 5 percent to $3.65, while Sygnus Credit Investments fell 5 percent to $11.40 as Guardian Holdings, Berger Paints and JMMB Group declined by 4 percent to $475, $7.70 and $30.31 respectively.
Interest rates on Bank of Jamaica CDs dipped again at this past week’s auction with the average rate slipping to 8.41 percent from 8.49 percent, at the previous week’s auction, with BOJ quarantining $104 billion. At the same time the foreign exchange market enjoyed buoyant flows with more funds entering the market each day than the amount dealers sold.
Another fact worth noting is that the Junior Market has a long history, with the market starting to rise around a month before the release of quarterly results and declining shortly after results are released.
Honey Bun’s return to the TOP10 Junior Market list this past week should enjoy increased investors’ interest with an expected jump in revenues and profits for the first quarter with the Easter coming at the beginning of April versus the 17th of April last year as well as improvement of gross profit margin that slipped last year.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.5 well below the market average of 13.5, while the Junior Market Top 10 PE sits at 5.7 compared with the market at 11.2. The differences are important indicators of the level of likely gains for ICTOP10 stocks. The Junior Market is projected to rise by 255 percent and the Main Market TOP10 an average of 276 percent, to May 2024, based on 2023 forecasted earnings.
The Junior Market has 11 stocks representing 23 percent of the market, with PEs from 15 to 28, averaging 20, well above the average of the market. The top half of the market has an average PE of 16, suggesting that this may be a logical value for junior market stocks currently.
The 16 Main Market stocks with the highest value are priced at a PE of 15 to 115, with an average of 31 and 20 excluding the highest PE stocks and 20 for the top half excluding the stocks with the highest valuation.
The above average shows the extent of potential gains for the TOP 10 stocks.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings 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 are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.
Nice gains for ICTOP10 stocks, Purity returns
The Main and Junior Markets did not maintain the sharp bounce of the previous week, but most ICTOP10 Junior Market stocks ended with gains. In contrast, the Main Market ended with mostly modest losses, with 138 Student Living rising 5 percent to $5.30 and JMMB Group declining by 5 percent to $31.49, all other changes in the Main Market were two percent or less.
The Junior Market had one change in its TOP10 list as Iron Rock Insurance and Image Plus climbed 13 percent to $2.27 and $2.03, respectively, while Main Event and Honey Bun rose 5 percent to $12.26 and $6.75, respectively, with the only sizable decline being a 9 percent fall for Tropical Battery to $1.90.
Image Plus never benefitted from any serious IPO bounce seems to be finally finding buying interest and closed the past week with 159,904 shares on the bid at $2.02, 160,746 at $2 and just over 800,000 between $1.90 and $1.95, with 25,987 stocks on offer at $2.03, 81,709 at $2.05 with one big offer of 1.72 million units at S2.50 with smaller offers before the this. There has been healthy trading in the stock recently, with trading of 824,526 units on Thursday. Trading on Wednesday saw 1,153,255 shares changing hands in the stock, with 910,000 units on Tuesday and 1.75 million shares on Monday, which seems to have cleared out a great deal of overhang in the market.
Update on interest rate developments. A number of developments taking place in the economy are worth watching. Following last week’s $35 billion Bank of Jamaica CD auction that saw the average rate coming in at 8.49 percent, this week’s auction saw an offer of $34 billion, with the average rate remaining the same as the previous week with fewer funds chasing the offered amount. Another positive development is the average inflation rate running at 45 percent less than the same time last year and averaging 2.4 percent per annum since November last year. Foreign exchange inflows have been strong, with the NIR growing at $66 million in February and 220 million in March, putting it at a record end of month level as initial data suggest that tourism arrivals and foreign exchange generated by that industry exceed the similar period in 2019, the last year without the impact of covid-19 negatively affecting the sector. On top of those positive developments, corporate profits are expected to enjoy a good bounce for the majority of companies for the first quarter.
The Junior Market has a long term pattern, with the market starting to rise around a month before quarterly results are due and declining shortly after results are released. This is a pattern worth noting that can be built into investment decisions to improve returns.
Dropping from the TOP10 Junior Market list this past week was Honey Bun, but investors should expect a big jump in revenues and profits for the first quarter, with the Easter coming at the beginning of April versus the 17th of April last year, as well as an improvement of gross profit margin that slipped up last year.
Returning to the TOP10 is Consolidated Bakeries in the number 3 spot. The company is projected to report a solid first quarter profit, with the Easter holidays coming at the start of April compared with April 17 last year and ensuring that mostly all Easter bun sales will be reported in the March quarter unlike 2022. The company reported a profit in 2022 a big improvement over a loss in the previous three years. ICInsider.com projects earnings of 40 cents for 2023 and 75 cents for 2024 with the company benefitting from a full recovery of the local economy and increase efficiency and reduction in borrowings. At the end of the week, the average PE for the JSE
Main Market TOP 10 is 5.6, well below the market average of 13.5, while the Junior Market Top 10 PE sits at 5.7 compared with the market at 11.1. The differences are important indicators of the likely gains for ICTOP10 stocks. The Junior Market is projected to rise by 256 percent and the Main Market TOP10, an average of 271 percent, to May 2024, based on 2023 forecasted earnings.
The Junior Market has 10 stocks representing 21 percent of the market, with PEs from 15 to 29, averaging 19, well above the market’s average. The top half of the market has an average PE of 15, suggesting this may be a logical value for junior market stocks.
The 16 stocks with the highest value in the Main Market stocks are priced at a PE of 15 to 115, with an average of 30 and 19 excluding the highest PE stocks and 19 for the top half excluding the stocks with the highest valuation.
The above average shows the extent of potential gains for the TOP 10 stocks.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market, but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks will likely deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings for the current fiscal year. Expected values will change as stock prices fluctuate, resulting in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.
ICTOP10 rides big weekly JSE rally
While the Main and Junior Markets rebounded sharply during last week, ICTOP10 stocks ended with varying movements, with gains and losses in both markets hitting 16 percent. It was an interesting week in which the main market gained over 18,000 points for the week with all days closing with gains including the Friday of the previous week, but it sits at a resistance level and is a signal worth watching.
The Junior Market put on 200 points since Thursday, March 23 and had one minor negative trading day during the period, however, the last day accounted for nearly half of the above gains.
While Bank of Jamaica held their overnight rates at 7 percent, their CD rate that fell 16 percent in the previous week to an average of 8.85 percent from over 10 percent where it stood for several months, BOJ offered a huge $35 billion this past week, but the average rate fell to 8.49 percent after $70 billion chased the amount offered. Importantly, the central bank cut the stock of CDS it holds from a peak of $109.5 billion on March 3, but at the latest auction, it amounted to $88.85 billion, marginally up from $82 billion on the 17th.
At the end of the past week, in the Junior Market TOP10 four stocks gained and five declined. KLE Group jumped 16 percent to $1.69 and Tropical Battery rose 7 percent to close at $2.08. General Accident dropped 16 percent to $5 and Everything Fresh fell 6 percent to close at $1.45.
The Main Market TOP10 JMMB Group climbed 15 percent to $33.25, Jamaica Broilers gained 12 percent to $37.10, Caribbean Producers popped 7 percent to $9.70 and NCB Financial with a rise of 6 percent to $75. Berger Paints fell 10 percent to $8.20 and 138 Student Living with a fall of 6 percent to $5.05.
The Junior Market has a long term pattern, with the market starting to rise around a month before quarterly results are due and declining shortly after results are released. This is a pattern worth noting that can be built into investment decisions that can improve returns.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.6, well below the market average of 14.2, while the Junior Market Top 10 PE sits at 5.8 compared with the market at 11.4. The differences are important indicators of the level of likely gains for ICTOP10 stocks. The Junior Market is projected to rise by 248 percent and the Main MarketTOP10 by an average of 267 percent, by May 2024, based on 2023 forecasted earnings.
The Junior Market has 11 stocks representing 23 percent of the market, with PEs from 15 to 28, averaging 20.4, well above the average of the market. The top half of the market has an average PE of 16, suggesting that this may be a logical value for junior market stocks currently.
The Main Market 19 highest valued stocks are priced at a PE of 15 to 115, with an average of 29 and 21 excluding the most valued stocks and 20.5 for the top half excluding the stocks with the highest valuation.
The above average shows the extent of potential gains for the TOP 10 stocks.
ICTOP10 focuses on likely yearly winners, accordingly, the list includes some of the best companies in the market but not always. ICInsider.com ranks stocks based on projected earnings, allowing investors to focus on the most undervalued stocks and helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023 and are ranked in order of potential gains, computed using projected earnings 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 are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.