The Junior Market of the Jamaica Stock Exchange Traded mixed on Thursday, with the volume of stocks traded rising 34 percent, with a 51 percent higher value than Wednesday after all of the 49 listed securities attracted investors’ interest and action, up from 45 on Wednesday and closed with 13 rising, 22 declining and 14 were unchanged.
At the close, 4,690,775 shares were traded for $17,476,868, compared to 3,501,650 units at $11,545,037 on Wednesday.
Trading averaged 95,730 shares for $356,671 compared to 77,814 units at $256,556 on Wednesday, with the month to date averaging 153,156 stock units at $417,685 compared to 163,578 stocks for $428,758 on the previous day. February closed with an average of 318,024 units at $782,332.
Fontana led trading with 830,242 shares for 17.7 percent of total volume, followed by Spur Tree Spices with 604,131 units for 12.9 percent of the day’s trade and Jamaican Teas with 585,074 units for 12.5 percent market share.
At the close, the Junior Market Index declined 38.92 points to 3,825.48.
The PE Ratio, a measure of computing appropriate stock values, averages 11.3. The PE ratios of Junior Market stocks are calculated using the last traded stock price with ICInsider.com projected earnings for the financial years ending between November 2022 and August 2023.
Investor’s Choice bid-offer indicator shows three stocks ending with bids higher than their last selling prices and four with lower offers.
At the close, Access Financial rallied 95 cents to $23 with investors transferring 1,010 shares, AMG Packaging shed 57 cents to end at $2.38 after a transfer of 10 units, CAC 2000 gained 10 cents ending at $7.10 with 3,507 stock units clearing the market. Dolphin Cove advanced 42 cents to $15.90 as investors exchanged 1,920 stocks, Fontana lost 15 cents to finish at $8.40 after a transfer of 830,242 stock units, Fosrich gained 9 cents to close at $2.99 with the swapping of 346,011 shares. General Accident dipped 16 cents in closing at $4.69 with 10 units changing hands, Indies Pharma fell 25 cents to end at $2.75 with investors trading 10 stocks, Jamaican Teas lost 8 cents to close at $2.25 in an exchange of 585,074 stocks.KLE Group shed 30 cents ending at a 53 weeks’ low of $1.44 in switching ownership of 61 shares, Knutsford Express fell $1.77 to end at $10.06 after 911 stock units passed through the market, Lasco Distributors dipped 20 cents to $2.60 as investors exchanged 25,828 units. Lumber Depot lost 19 cents ending at $2.20 with a transfer of 16,515 shares, Main Event popped 13 cents to settle at $11.85 after exchanging 447 stock units, Medical Disposables fell 34 cents in closing at $4.80, trading 22,010 units. MFS Capital Partners lost 8 cents to close at $3.62 with 15,055 stocks crossing the exchange, Paramount Trading shed 23 cents to end at $2.15 after a transfer of 1,540 units, Regency Petroleum gained 14 cents in closing at $2.19 in switching ownership of 350,435 stocks and Stationery and Office Supplies fell 73 cents ending to $14.25 with an exchange of 1,952 stock units.
In the preference segment, CAC 2000 9.5% preference share shed 15 cents to end at 90 cents with a transfer of 180 shares.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
3 new ICTOP10 stocks after week’s gains
The Main Market gained 1.3 percent and the Junior Market 2.4 percent over the previous week, the first sign that stocks may be coming back to life, following the end of earning season with a mixed bag of results and the sounding of prospects for a better period ahead, with cost pressures that existed last year in stockpiling supplies to meet demand that squeezed margins have started to recede, with the promise of higher profit margins ahead.
The period saw many companies reporting solid gains in profit that investors are yet to award with better prices than the results demand, which is not expected to last for long as supplies of many stocks have been declining in recent weeks.
ICTOP10 has three new additions to the Junior Market TOP10 while the Main Market remains steady.
The week closed with rising stocks dominating the Junior Market TOP10. Paramount Trading fell 9 percent in the prior week, led rising stocks this past week, with a gain of 18 percent to $2.35, followed by Main Event, put on 15 percent to land at a new high of $12.39, Lasco Distributors and Lasco Manufacturing rose 8 percent to $2.81 and $4.30, respectively. Iron Rock Insurance fell 13 percent to $2.08 and Tropical Battery dipped 4 percent to $2.20.
Six stocks rose in the Main Market TOP10, with 138 Student Living rising 10 percent to $5.50, the price of Jamaica Broilers rose 9 percent to $36 as investors warmed to the stock following release of outstanding second quarter numbers and the price having a long way to run. Caribbean Producers, that is undervalued, rose 6 percent to $10 as selling pressure eased somewhat.
Price changes resulted in Paramount Trading, Main Event and Lasco Manufacturing exiting the Junior Market TOP10 and replaced by AMG Packaging, Everything Fresh and Stationery and Office Supplies.
AMG Packaging enjoyed improved profit margin in the November quarter compared with that in 2021, even as sales fell slightly in the latest quarter to November, which augurs well for increased profit in the current year, with revenues projected to rise in the year with more business opportunities as the economy continues to grow at a healthy pace. Everything Fresh and Stationery and Office Supplies (SOS) earnings reflect that for the current year. Everything Fresh now heads the Junior market TOP10, having reported profit for an entire year in 2022 for the first time since they released a depressed $16 million profit in 2018. Profit came in at $48 million before tax for 2022, a modest change from $47 million reported for the nine months to September after finance costs rose 43.5 percent in the December quarter over the nine months to September. With 2023 setting up to be the strongest tourist season since 2019, the company is set to see a big jump in business from that sector and profit in 2023, that should see the company earned 30 cents per share, that is why it is in ICTOP10. SOS posted record profits for 2022 with a 169 percent increase before tax from a 55 percent jump in revenues. Of note are a 35 percent increase in fourth quarter revenues and a deal struck with a company in Trinidad to cross sell products that should add to revenues in 2023 and push earnings to $2 per share for the year. With improving profits and shrinking supplies outside of the TOP 10 shareholders, who control 91 percent of the issued shares, the stock is setting up for a stock split that cannot be far off and, when given, will catapult the stock price upwards.
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 13.9, while the Junior Market Top 10 PE sits at 6.1 compared with the market at 11.8. The differences are important indicators of the level of the undervaluation of the ICTOP10 stocks. The Junior Market is projected to rise by 240 percent and the Main Market TOP10 by an average of 284 percent to May 2024, now that TOP10 stocks earnings are based on 2023 profits.
The Junior Market has 13 stocks representing 27 percent of the market, with PEs from 15 to 26, averaging 19.5, well above the market’s average. The top half of the market has an average PE of 17. The above average shows the extent of potential gains for the TOP 10 stocks.
The situation in the Main Market is similar, with the 12 highest valued stocks priced at a PE of 15 to 115, with an average of 32 and 23 excluding the highest valued stocks and 21 for the top half excluding the highest valued 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.
Elite out Tropical back in ICTOP10
The Main Market of the Jamaica Stock Exchange closed the past week with gains in the indices. Still, the Junior Market suffered a significant loss on Friday to close the week with a loss following a sizable fall in the price of Fosrich. This most heavily weighted Junior Market stock fell from an average price of $3.20 at the previous week’s close down to $2.63.
ICTOP10 has only one new addition this week, in the Junior Market TOP10 and none in the Main Market, following major volatility in price movements in the listings.
In closing out the week, Iron Rock Insurance led stocks rising, with a gain of 13 percent to $2.30, followed by General Accident, that rose 6 percent to $4.99, while Main Event put on 4 percent to land at $10.80. Elite Diagnostic fell 21 percent to $2.45 as demand vanished for the stock following release of poor second quarter results. Paramount Trading fell 9 per cent to $2, Image Plus and Lasco Distributors dipped 5 percent to $1.90 and $2.60, respectively.
Five stocks rose in the Main MarketTOP10, with the price of Key Insurance rising 7 percent to $3.20, Sygnus Credit Investments rose 5 percent to $12.57, while 138 Student Living and Scotia Group popped 4 percent higher to $5.01 and $34.20, respectively. Berger Paints dropped 8 percent to $9.25, Caribbean Producers, Guardian Holdings and Jamaica Broilers lost 3 percent.
Earnings per share for Elite Diagnostic was revised down to 28 cents per share for the current year, following a small loss of $7 million in the December quarter, even as revenues rose a solid 20 percent or $30 million over the same quarter in 2021, resulting in the stock dropping out of the ICTOP10, to be replaced by Tropical Battery that is returning after a short absence.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.4, well below the market average of 13.7, while the Junior Market Top 10 PE sits at 6.5 compared with the market at 11.6. The differences are important indicators of the level of the undervaluation of the ICTOP10 stocks. The Junior Market is projected to rise by 213 percent and the Main Market TOP10 by an average of 288 percent to May this year, assuming the market gets back to last year’s valuation. The primary concern for the Main Market achieving such gains by May is that the list is dominated by financial companies that are out of favour and may need to get to the summer months before the full interest of investors is visible.
The Junior Market has 13 stocks representing 27 percent of the market, with PEs from 15 to 27 averaging 19 compared with the above average of the market. The top half of the market has an average PE of 17. The above average shows the extent of potential gains for the TOP 10 stocks.
The situation in the Main Market is similar, with the 17 highest valued stocks priced at a PE of 15 to 109, with an average of 32 and 23 excluding the highest valued stocks and 21 for the top half excluding the highest valued 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.