Another quiet week for IC TOP 10

For a second consecutive week, there were no changes in the companies on the IC TOP 10 listings, with the markets going sideways and little or no significant price moving news.

Barita public stock offer pulled money away from other JSE stocks.

The Jamaica Stock Exchange market activity was negatively affected by funds diverted away from the as investors moved money into the successful Barita Investments issue of new shares. The Issue closed on Wednesday gone and was upsized to $13.5 billion, resulting in a more than doubling of the issued shares from $10.88 billion to $24.38 billion and the overall equity capital to $28.74 billion.
The past week that saw the local market trading in a narrow range, with the Junior Market closing slightly down for the week after ending the previous week at the highest point since August 28 and the Main Market had the highest weekly close since the end of August.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 292 to 695 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year results projected to show recovery from the 2020 financial year final numbers. The top three Main Market stocks, with expected gains of 204 to 228 percent, are Radio Jamaica, followed by Berger Paints, with the price rising 7 percent during the week and JMMB Group.
This week’s focus – Tropical Battery issue for 325 million ordinary shares at $1 each of with up to 187.5 million units reserved for priority applications, opens Tuesday, September 22, with the scheduled closing of September 30, subject to the right of the Company to close it earlier. With earnings per share around 7.7 cents, the stock is priced around a PE ratio of 13 times 2020 earnings, leaving little or no room for short term gains as it is priced 19 percent above the market average.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.3 and the Junior Market 11, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere six at just 55 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.2 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 280 percent, and 151 percent for the JSE Main Market, based on 2020-21 earnings, indicates potentially more significant gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on possible gain for each Company, taking into account the earnings and PE ratios for the current fiscal year.  Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

Q3 profit jumps 43% for the Lab

Profit jumps 43 percent before tax at Limners and Bard trading as the Lab, with revenues up 41 percent for the third quarter. Aftertax, profit climbed 66 percent from $12.7 million to $21 million for the July quarter.
Nine months profit, rose 41 percent to $68.6 million, from $486 million, while profit rose 17 percent from $88.6 million before tax in 2019, to $107.8 million. In 2019, the Company incurred a tax charge of $19 million for the nine months. Profit for the nine months equals the 2019 full year pretax profit of $107.5 million.
The cost incurred in generating operating revenue grew faster than incomes with an increase of 46 percent for the nine months to $459 million and 48 percent for the quarter to $154 million.
Administration expenses and other costs rose 47 percent to $119 million for the nine months and by 31 percent for the quarter to $40 million. In a report accompanying the results, the chairman, Steven Gooden and Kimala Bennett, Chief Executive Officer, stated, “these included a systemization initiative and training to assist inefficiencies linked to our growth drivers and a pay-out of 50 percent of our 2019 employee profit share.

Kimala Bennett, Chief Executive Officer of The Lab.

The Company earned 2 cents per share in the quarter and 11 cents for the nine months. IC Insider.com projects the full-year earnings ta 16 cents per share, with expenses traditionally lower in the final quarter. The Company generated cash flows from operating of $116 million, up from $77 million in 2019.
Shareholders’ equity climbed to $45 million from $332 million at the end of July 2019. Current assets stand at $529 million including Cash and cash equivalents of $384 million, up from $213 million in July 2019. Current liabilities amounted to $134 million leaving strong net current assets at the end of the period. Borrowings stood at just $66 million.
The stock last traded at $2.80 on the Junior Market of the Jamaica Stock Exchange on Monday for a PE ratio of 17.5. With the current year ending a little over a month from now and IC Insider.com projecting 28 cents earnings per share for fiscal 2021, the stock can be considered appropriately priced.

IPOs are back the Tropical issue

Just when investors thought COVID 19 had killed off IPOs for this year, suddenly pops up, Tropical Battery‘s long-promised initial public offer. The prospectus for the issue is now available to the public.
The issue for 325 million ordinary shares at $1 each of with up to 187.5 million units reserved for priority applications, opens September 22 and is scheduled for closing on September 30, subject to the right of the Company to close it earlier.
The Company intends to apply for the shares to be listed on the Junior Market of the Jamaica Stock Exchange, subject for at least $260 million being raised, by way of this invitation.
The total issued shares following the offer will be 1.3 billion units, with the parent company owning 75 percent. That will allow enough shares to be in the public hands to facilitate adequate liquidity in the stocks for some time.
The Company generated profit before tax of $87 million from revenues of $1.74 billion in 2019, a decent increase of 18.6 percent higher than in 2019 and a pretax profit of $45 million from revenues of $1.47 billion in the prior year, to September or 8.6 percent above the 2018 sales.
Gross operating revenue for the nine months to June this year increased nine percent to $1.36 billion from $1.25 billion in 2019, with profit before taxation falling from $67.6 million to $62 million.
Future growth, the Company says, “will come primarily from the addition of new product lines, i.e., Renewable Energy Batteries, Oils and Lubricants, Tyres, etc., organic growth of existing products, expansion and the renovation of our retail stores.”
The proceeds of IPO will be split equally between the selling shareholder and the Company, resulting in $162.5 million going to each, net of cost.
The Company plans to use the amount collected for expansion and working capital purposes, including but not limited to new product lines, expansion and renovation of retail stores, including an expansion of the parking area at the retail store at Grove Road in St Andrew. Completion of the buildout of and relocating to the new warehouse, head office and retail store at Ferry, Acquiring and install information technology systems for greater efficiency and improve customer experience and expansion of Mobile delivery fleet of vehicles.
Total shareholders’ equity at the end of June stands at $593 million, while our long term liabilities fell by to $315 million with the total interest-bearing debt of $415 million. The Company is owed $190 million by a related party and is interest-free, but payable on demand.
With earnings per share around 7.7 cents, the stock is priced around a PE ratio of 13 times 2020 earnings, leaving little or no room for short term gains.
NCB Capital Markets are the brokers for the offer. Unfortunately, for investors, there are no forecasted earnings included in the prospectus to help to guide them. This practice leaves a lot to be desired and it is fulltime, the authorities step up to the plate and ensure that all prospectuses include forecasted data for a least three years. That is not asking too much in the drive to build a developed capital market.

Quiet week for IC TOP 10

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The past week was quiet for IC TOP 10 listings, resulting in no change to the list at the end of the week that saw the local market trading in a narrow band and the Junior Market closing at the highest point since August 28 and the Main Market since the end of August.

Scotiabank profit drops in Jamaica.

The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 292 to 695 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year results, projected to show recovery from the 2020 financial year final numbers. The top three Main Market stocks, with expected gains of 205 to 264 percent, are Berger Paints followed by Radio Jamaica and JMMB Group. All three suffered declines during the week.
This week’s focus: Scotia Group reported a net income of $5.56 billion for the nine months ending in July, compared to $9.79 billion for the corresponding 2019 period. Overall, loans advanced, grew 12 percent mainly due to the strong performance of the Commercial Banking unit, increasing 24 percent versus the prior year. Retail loan grew 5 percent year over year, driven by strong mortgage growth of 16 percent. Total revenues, excluding expected credit losses for the nine months, ended July at $32.1 billion, a reduction of $1.7 billion or 5.1 percent, compared to 2019. For the July 2020 quarter, gross revenues fell from $12.4 billion to $11 billion, with non-interest income contributing $1.1 billion to the decline. Administrative and other expenses were essentially flat at $5.8 billion year over year, a $2 billion increase in provision for expected loan loss helped push profit down in the quarter, to $1.55 billion from $4.2 billion in 2019. Notably, while loans amounting to $221 billion at the end of July grew 12 percent year over year, loans declined modestly from $223 billion at the end of April, the result of the increased credit loss provisioning.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, an indication of the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.1 and the Junior Market 10.9, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6 at just 55 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.2 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 279 percent, and 153 percent for the JSE Main Market, based on 2020-21 earnings, an indication of potentially, greater gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year.  Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

Lasco is back in IC TOP 10

Lasco Distributors and Medical Disposables are back in the Junior Market IC TOP 10 while there are no changes to the Main Market IC TOP 10 listing.
Stationery and Office Supplies and Jetcon Corporation dropped out of the Junior Market list, the former earning, was revised down for 2020, with the loss incurred in the June quarter while Jetcon price inched up, to be squeezed out of the top stocks.
The top three stocks in each market saw little change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 292 to 695 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic, the focus on all three is on the 2021 fiscal year results that are projected to show recovery from the 2020 financial year final numbers. The top three Main Market stocks, with expected gains of 205 to 264 percent are Berger Paints followed by Radio Jamaica and JMMB Group, all three suffered declines during the week.
The targeted average PE ratio of the market is 20 based on the profit of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, an indication of the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15 and the Junior Market 10.8, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6 at just 56 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.1 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 279 percent, and 157 percent for the JSE Main Market, based on 2020-21 earnings, an indication of potentially, greater gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year.  Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

Another big IC TOP 10 winner

After a record run this past week, Epply hit a record high of $23, but closed at $22 and leaped out of the Main Market IC TOP 10 listing, with a gain of 80 percent from the end of March, when the stock went into the TOP 10 for 2020.
During the past week, companies continued the release of midyear results, with little impact on the market. Jamaica Broilers released decent first-quarter results to the end of July, with a slight improvement in after-tax profit, with operating profit rising 25 percent on lower revenues. Wisynco Group full-year audited financials showed modest gains in profit while Blue Power profits jumped 41 percent. Of the three, only Jamaica Broilers is in the TOP 10. At the close of the week, Medical Disposables dropped out of the Junior Market listing and replaced by Jetcon Corporation. NCB Financial returns to TOP 10 and now sits at the bottom of the list, having replaced Eppley.
The top three stocks in each market saw little change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 300 to 676 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic, the focus on all three is on the 2021 fiscal year results, projected to show recovery from the 2020 financial year final numbers. The top three Main Market stocks, with expected gains of 205 to 264 percent, are Berger Paints followed by Radio Jamaica and JMMB Group, all three suffered declines during the week.
This week’s focus: Jamaica Broilers revenues declined 5 percent in the July quarter to $12.6 billion from $13.26 billion in the prior year. Operating profit rose 25 percent to $851 million from $679 million in the prior year, with profit after taxes rising moderately from $361 million to $383 million. A significant fall in administration and other expenses was the main contributor to the improved profit performance by adding $375 million to the results with a decline in cost from $2.28 billion down to $1.9 billion, while other income added nearly $200 million to the increase as well after gross profit had declined by $377 million to hit $2.95 billion. Earnings per share rose to 41 cents.
The targeted average PE ratio of the market is 20 based on profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, an indication of the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15 and the Junior Market 10.5, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 5.7 at just 54 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 291 percent, and 161 percent for the JSE Main Market, based on 2020-21 earnings, an indication of potentially greater gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year.  Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

 

General Accident is back in IC TOP 10

General Accident released six months’ results at the top of the week, but the market did not like it, with falling premium and profit in the June quarter leaving the stock price languishing at $6.40, having closed the prior week at $7.20. The fall elevating it back into the Junior Market TOP 10, with Lasco Distributors dropping out, while there was no change to the main market list.
Noticeable changes in the TOP 10, during the week, was a $3.90 rise in the price of Scotia Group to end at $48. Grace Kennedy slipped 99 cents to close at $56.01, Jamaica Broilers lost $3 to close at $23 and Access Financial rose 98 cents to last trade at $23.50 and closed, with the bid at $24.
The top three stocks in each market saw little change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 258 to 692 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic, the focus on all three is on the 2021 fiscal year results that are projected to show recovery from the 2020 financial year final numbers.
The top three Main Market stocks, with expected gains of 188 to 223 percent, are Berger Paints followed by Radio Jamaica and JMMB Group.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, an indication of the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15 and the Junior Market 10.6, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere six at just 56 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.1 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 277 percent, and 153 percent for the JSE Main Market, based on 2020-21 earnings, an indication of potentially more significant gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on possible gain for each company, taking into account the earnings and PE ratios for the current fiscal year.  Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

Profit up 21% for Lasco Manufacturing

Profit after taxation rose 21 percent from $282 million in the first quarter of 2019 to $342 million in 2020 at Lasco Manufacturing as revenue rose 4 percent from $1.78 billion to $1.84 billion.

Lasco Manufacturing products.

Other income fell 114 percent, from $17 million to a loss of $2 million and administrative and other operating expenses came in 6 percent lower than the comparative period in 2019 at $311 million.
Gross profit increased 8 percent from $668 million to $720 million as direct costs moved from $1.1 billion in 2019 to $1.2 billion in 2020 and gross profit margin improved by 2 percentage points to 39 percent from 37 percent.
Operating profit before finance charges rose 15 percent in the quarter to $407 million from $355 million. Finance cost declined in the quarter, to $16 million from $32 million in 2018 as the company continues to pay down loans that used in financing a major expansion to the plant.
Cash flow from operating activities netted $78 million, down 84 percent from the first quarter in June 2019, reflecting a major increase in inventories and payables.

Lasco Manufacturing checkered annual profit performance, but the 2021 fiscal year could be a record.

At the end of June 2020, shareholders’ equity stood at $7 billion with the current portion of long-term loans at $496 million and long-term loans at $506 million. Current assets ended the period at $4.8 billion inclusive of trade and other receivables of $2 billion, cash and bank balances of $1.2 billion, while current liabilities stood at $1.6 billion.
The stock traded at $3.90 on the Junior Market of the Jamaica Stock Exchange. Earnings per share came out at 8 cents for the quarter. IC Insider.com is forecasting EPS of 35 cents per share for the full year that puts the PE at 11.4 times 2021 earnings.
The company paid a dividend of 6 cents per share totaling $250 million on July 24.

Kremi back in IC TOP 10

In a week when several companies released quarterly results, few had any positive information to move prices forward. Against this development, some stocks pulled back a bit, flowing from weaker than expected results. Last week’s drop out candidate,

Caribbean Cream posted big gains in profit in Q1.

Caribbean Cream, closed the week at $4.10, to return to the Junior Market TOP 10, at the expense of Mailpac Group. There were no changes to the main market list.
The Mailpac Group operations enjoyed a 33 percent rise in revenues for the six months to June and a 36 percent increase in profit over the similar period in 2019. Flowing from those results, IC Insider.com revised the earnings per share down to 20 cents, thus reducing the potential gain based on 2020 earnings, moving it out of the top listing.
The top three stocks in each market saw little change in ranking, leaving the top three Junior Market stocks, with the potential to gain between 281 to 676 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic, the focus on all three is on the 2021 fiscal year results, that are projected to show recovery from the 2020 financial year final numbers.
The top three Main Market stocks with expected gains of 189 to 223 percent are Berger Paints followed by Radio Jamaica and JMMB Group.
This week’s focus: 138 Students Living reported a 44 percent increase in revenues to hit $334 million from $223 million in the June 2019 quarter and a 60 percent rise in the nine months to $1.09 billion. The company moved from a loss of $17 million in the 2019 third quarter to a profit of $132 million in 2020 and from a loss of $60 million in the nine months to June, to a profit of $402 million. Operating cost fell in both periods compared with the 2019 cost. The big problem is that the company continues the extremely poor practice of not showing operating and administrative expenses separately, making it impossible to see what gross margins are. The significant increase in profit is due to claims made on the University going back to 2019, which are booked in the current year that distorts earnings from ongoing operations. While earnings per share for the quarter is an attractive 32 cents and year to date 97 cents. Earnings from ongoing operations suggest that the full year’s results should be in the order of 40 cents after a regular tax charge.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results, from now to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level, an indication of the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.2 and the Junior Market at just 10.9, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, reflecting better profit opportunities in the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks averages a mere 5.9 at just 54 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.2 or 54 percent of the PE of the overall market.
The average projected gain for the Junior Market IC TOP 10 stocks is 278 percent, and 152 percent for the JSE Main Market, based on 2020-21 earnings, an indication of potentially more significant gains in the Junior Market than in the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on possible profit for each company, taking into account the earnings and PE ratios for the current fiscal year.  Expected values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.

Profit jumps 69% at Lasco Distributors

Profit at Lasco Distributors before tax soared by 69 percent to $317 million from a combination of higher revenues and lower administrative and other costs, but with a lower profit margin.
The company reported $187 million in profit before tax for the 2019 quarter. After-tax profit increased 57 percent from $164 million in 2019 to $258, from sales revenues that rose 8.44 percent to $4.7 billion.
Direct costs moved 10 percent from $3.5 billion to $3.8 billion and gross profit rose only 4 percent from $865 million to $896 million.
Other income jumped to $73 million from $53 million, while operating expenses fell 10 percent to $651 million from $725 million.
“During the period, there was an increase in our canned food products flagship – Lasco food, drink and pharmaceutical products. However, there has been a significant reduction in sales of beverage products due to closures of schools, hotels and social gatherings,” the Chairman, Lascelles Chin, noted in his report to shareholders.
Cash from operating activities was up to $1.2 billion from $26 million in 2019, contributing to the sharp improvement was a reduction in inventories, receivables and increased payables. At the end of June 2020,

Lasco’s ICool drinks.

shareholders’ equity stood at $5.8 billion compared to $5.4 billion in June 2019 and $5.7 billion at the end of the fiscal year ending March 2020. Total current assets stand at $7.5 billion inclusive of cash funds of $2.5 billion, receivables of $2.5 billion and inventories of $2.4 billion, while Current liabilities stood at $3.96 billion. The company has long-term borrowings of $9 million, with short term debt being a mere $76 million.
The company’s shares were listed on the Junior Market in October 2010, resulting in a tax concession of 10 years, which expires during the current fiscal year.
Earnings per share came out at 7 cents for the quarter and IC Insider.com is forecasting 40 cents per share for PE of 7.6 times earnings with the stock trading on the Junior Market of the Jamaica Stock Exchange at $3.05.