Caribbean Cream delivered better results in the August quarter than in May period with an increase in revenues of 18 percent versus a 1 percent increase in the first quarter.
Profit declined in the latest quarter but by 23 percent, to $35.6 million versus a 40 percent fall in for the six months to $70 million, down from $117.6 million. Cash generated from operations came in at $98 million but Kremi spent $102 million on acquisition of fixed assets.
Gross profit declined by just 4 percent in August quarter versus 14 percent in the May quarter as increase of direct cost outpaced the rise in revenues. In the end revenues came in at $354 million in the August quarter up from $319 million in the May quarter and $300 million in yin 2016 and for the six months $673 million from $615 million in 2016.
Administrative, selling and distribution expenses increased moderately from $71 million to $76 million in the quarter and form $136 million to $147 million for the half year.
At the end of August cash and equivalent amounted to $175 million and borrowed funds $90 million. Shareholders’ equity stands at $662 million.
Earnings per share for the half year is 19 cents and 9 cents for the August quarter. IC Insider.com is forecasting earnings of 50 cents for the full year to February 2018 and 75 cents for 2019. The stock last traded at $6.70 for a PE of 13.4 which is in line with the Junior Market valuation.
Increased cost squeezes Kremi’s profit
Active insider trading since August
In the past some of the trades in the local market have not sent any known information when viewed against developments in the companies subsequent to the trades by insiders. In the case of a few of the listed companies investors are well advised to pay attention.
Insiders’ trade in August and September to date, are as listed below trades the various companies reported to the Jamaica Stock Exchange.
Sagicor – There was slightly more buying than selling of shares in Sagicor Group. A related party of the Sagicor Group purchased 71,716 shares on September 7 and 9, and a member of the Senior Management sold 70,000 shares on September 9, while two executives sold 155,000 shares on September 1, and related parties purchased in total 240,075 shares between September 1 and 2. An Executive sold 82,700 shares and related parties purchased 99,046 of the group’s shares, between August 29 and 30.
A connected party purchased 152,750 of the group’s shares on August 26, while a related party purchased 48,650 shares on August 22, and a director sold 173,800 shares on August 15, while another director purchased 2,350 shares on August 15, and a director sold 165,000 shares on August 16, while a director purchased 236,250 shares on August 16.
A JMMB Group connected party sold 1,000,000 of the company’s shares September 7 and a connected party sold 9,000 shares on August 18.
A Jetcon Corporation connected party purchased 199,800 shares on September 6 and 72,964 shares on August 22, while a related party purchased 152,699 shares and connected parties purchased a total of 279,735 shares on August 16-17.
Company Executives purchased 24,633 and 29,240 Caribbean Cement shares on September 1 and a Senior Manager purchased 300 shares on August 17.
At Grace Kennedy, a senior officer sold 75,144 shares on August 29 and 30. Jamaica Stock Exchange saw connected parties purchasing 8,234 and 18,034 shares on August 31, while a director purchased 2,000 shares on August 18.
Whither local stocks – NCB Capital
The Jamaica Stock market enjoyed a great 2015 with stocks doubling in value, but the performance of the market in 2016, so far, has not been a spectacular as investors take a more cautious approach to the market that was revalued sharply last year, from a very low valuation.
At the end of August the local market had only record about a third of the gains made in 2015. Starting in October last year the market made a meteoritic rise.
Although, the market overall has not grown very much to date, several stocks have done well with the junior market having 15 stocks rising more than 30 percent, including 3 gaining more than 100 percent and one with more than 300 percent. Twelve main market stocks are up more than 30 percent to date.
One brokerage house just released a report on the market and a selection of stocks. Below is an extract of the report on the market. IC Insider is of the view that most of the comments below are on target, a few are off, but does not change the general thrust of what is said to be happening in the market. Comments by the brokerage house on individual stocks have glaring errors in some cases and forecast in others may be way off the mark, as such investors using the report would be well be advised to be cautious about buy or sell decisions based solely on the recommendations.
Stocks continued to trend upwards albeit at a much slower pace than last year since the start of the year, the report states. “The Combined, Main Market and All Jamaica Composite Indices have returned 7.9 percent, 5.7 percent and 5.8 percent respectively to August 26, 2016. This, however, represents a slowdown relative to the 28.8 percent, 28.5 percent and 29.1 percent increase recorded last year,” NCB Capital Market advised their clients in their latest investors’ newsletter.
The report went on to say, “Improvement in the outlook for corporate earnings and an increase in investor confidence continue to drive market activity despite the run up in prices. The Junior Market however continues to see robust growth registering a 24.7 percent increase to August 26th relative to 33.1 percent last year.”
“Positive earnings performances in key sectors such as the manufacturing and financial services assisted in renewing investor interest in the equities market. The Food, Beverages & Tobacco segment of the manufacturing sector experienced some expansion, thanks to a rebound in local and international demand for consumer products resulting in growth in both local and export revenues.
Local companies have been focusing extensively on expanding into international markets which provides income diversification and better prospects for growth. Meanwhile, financial companies have been weathering the low interest rate environment well, and have seen some benefit from larger loan portfolios as well as an increase in fees and commission income in light of active revenue diversification strategies. Lower inflation has also assisted in increasing efficiency and improved margins.”
“The stock market should continue to see modest activity helped by improving macroeconomic conditions, low interest rates and the restoration of Junior Market incentives. Of note, with the earnings growth recorded thus far, valuations have remained reasonable, with the average Main Market P/E declining to 9.3X in August from 10.6X in January. The Junior Market P/E also decreased to 13.7X from 18.7X earlier this year. Shares of financial and manufacturing companies are expected to be the star performers.
The main risk to market activity however is an unfavourable turn in the business environment at the end of the IMF agreement next year. In addition, recent tax measures implemented could put upward pressure on inflation and impede the margin improvement being witnessed by companies.”
Strategy “In terms of identifying opportunities, we recommend that investors focus on stocks of companies with diversified revenue streams by type, geography and currency. Investors with the appropriate risk appetite should also take a closer look at some Junior Market stocks given that the potential for growth is greater than their main market counterparts. Companies such as Honey Bun and KREMI are expected to continue to do well. Another recommended strategy is for investors to take a more active approach to stock market investing by taking gains on stocks that are trading above their fair value estimates, with a view to re-enter at more favourable prices in the near term.”
Proven hits 52 weeks’ low
Lasco Manufacturing with 368,596 shares trading at $5.05, is the leading volume trade in the early Monday morning session, on the Jamaica Stock Exchange, followed by Proven Investments with 257,000 units with the price dropping to a 52 weeks’ low of 15.02 US cents, down from 17 cents at the close on Friday. 1834 Investments chipped in with 96,000 shares at $1.01.
The session had low volumes trading overall with less securities trading after 75 minutes of the market’s opening compared to Friday morning as the various indices declined across the board.
Market activity resulted in 23 securities changing hands, accounting for a volume of 921,863 shares 9 stocks gained and 7 declined. The average number of shares traded amounts to 40,081 units compared to an average of 77,695 units on Thursday.
The all Jamaica Composite Index dropped 482.38 points to 178,968.19, the Jamaica Stock Exchange Market Index fell 431.32 points to 161,071.14, the Jamaica Stock Exchange combined index declined by 415.83 to close at 172,122.84 points andthe junior market index slipped 1.56 points to 2,214.08.
JSE drops again on Wednesday
Scotia Group dominated trading in the main market with 2,314,908 shares changing hands with the price gaining $1.05 to close at $31.80, while Grace Kennedy closed at a new 52 weeks’ high of $125.05 as investors bought 8,410 units at 5 cents more than the closing price on Tuesday.
Stocks traded, amount to 9,425,498 units valued at $122,022,748, in all market segments with the junior market accounting for to 4,960,144 shares valued at $25,785,964 of all trades.
The JSE Market Index fell 682.71 points to end at 158,912.91. The all Jamaica Composite Index dropped 763.53 points to close at 176,554.45 and the JSE combined index declined 737.78 points, to end at 170,411.56.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator reading showed 13 stocks with bids higher than their last selling prices and 2 with lower offers.
At the end of market activities, Berger Paints dropped 45 cents to close with 95,404 shares changing hands at $4.05, Cable & Wireless, lost 15 cents with 372,926 units traded to close at $1.15, Caribbean Cement dropped $2.90 to close at $19.10 after trading 7,375 units. The price of 1834 Investments fell 5 cents in trading 73,414 units at $1, Jamaica Broilers dropped 25 cents with 545,162 units changing hands, to close at $14.50. Jamaica Producers traded 25,435 shares at $49, Jamaica Stock Exchange traded 31,150 shares unchanged at $19, JMMB Group traded 230,000 units to close at $9.80. Mayberry Investments had 12,239 units trading with a gain of 33 cents at $3.85, National Commercial Bank ended with 28,370 units changing hands at $42.10, for a rise of 30 cents, Pan Jamaican Investment Trust closed with 209,603 shares trading, as the price fell $1.40 cents to $26. Radio Jamaica had 140,504 shares trading at $1.50, Sagicor Group ended with 27,339 shares changing hands at $23, Sagicor Real Estate Fund traded 10,422 shares and rose 2 cents to close at $10.14. Salad Foods traded 90,000 shares at $8, Scotia Investments traded 12,000 shares but rose 50 cents to close at $26, Supreme Ventures ended trading with 133,313 units at $4.50, after falling 25 cents and Proven Investments ordinary share traded 40,871 units at 18 US cents.
JSE closes almost flat – Friday
Main market stocks collectively barely moved forward on Friday, with declining stocks being out-numbered by advancing ones 2 to1 with 10 stocks rising in the main market versus 5 declining. For the overall market, 29 securities changed hands, in all market segments with 14 rising and 5 declining.
The market closed with 11,607,440 units valued at $57,615,849 changing hands in all markets. The junior market accounted for 8,492,562 units changing hands, valued at $27,397,677.
The JSE Market Index gained just 7.60 points to 153,612.85 the all Jamaica Composite Index rose 8.50 points to end at 170,627.32 and the JSE combined index fell 215.80 points to close at 161,887.63.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator reading was 16 stocks with bids higher than their last selling prices and 7 with lower offers.
At the end of the market activities, Berger Paints ended with 28,300 shares trading at $4, Cable & Wireless closed with a loss of 1 cent at $1.40 with 802,055 units changing hands, Caribbean Cement added 80 cents to end at $20 with 151,107 shares trading. Carreras lost 49 cents to close at $64.50, while trading 11,000 units, Gleaner added just 1 cent to close at $2.01 with 184,073 shares changing hands, Grace Kennedy closed with 15,092 shares trading at $83, well below the $97 equivalent, it traded at, in Trinidad on Friday. Jamaica Broilers traded 33,000 units to close at $14.50, Jamaica Stock Exchange traded 31,000 shares to end with a gain of 50 cents at $22.50, JMMB Group had 25,490 units changing hands but fell 11 cents in closing at $10.49, Kingston Wharves traded 214,520 shares to close at $11.50 after rising 5 cents. Mayberry Investments had 27,938 shares trading at $4.40 for a rise of 35 cents, National Commercial Bank rose 3 cents with 102,600 shares changing hands, to close at $41.03, Proven Investments ordinary share traded 714,100 units at 20 US cents, down from 22 US cents, Pulse Investments added 36 cents to close at $2.91 with 77,000 units changing hands. Radio Jamaica ended with 25,862 units changing hands to gain 10 cents and close at $3.95, Sagicor Group gained 5 cents with 548,431 shares changing hands at $23.20, Sagicor Real Estate Fund traded 11,087 shares at $11. Scotia Group had 63,275 shares changing hands to close 50 cents higher at $31 and Supreme Ventures closed at $4.70 with 33,725 units changing hands.
Juniors treading water- Wednesday
At the close, 1 security ended with no bid and 7 securities had no stocks being offered for sale. There were 6 stocks closing with bids that were higher than their last selling prices and 5 ended with lower offers.
In trading, Access Financial trading firm with 9,776 units to close at $16.50, AMG Packaging fell 10 cents with 2,270 units changing hands, to end at $13, Caribbean Flavours end trading with 2,000 shares to close at $8.60. Caribbean Producers had 10,577 units changing hands to close with a gain of 20 cents at $4.80, Consolidated Bakeries traded 100 units to close with a gain of 20 cents at $1.60, General Accident traded 11,484 units but fell 20 cents to end at $2.80. Honey Bun traded 39,099 shares to close at $14, Jamaican Teas lost 60 cents and ended with 36,398 units changing hands at $7, Lasco Distributors closed with 1,209,662 units trading, to end at $5.50. Lasco Financial rose by 10 cents and ended at $3.20 with 30,096 shares changing hands, Lasco Manufacturing ended trading with 1,077,383 shares to close at $4 and tTech traded 12,538 shares to close with a loss of 6 cents at $4.61.