Jetcon Corporation and ISP Finance have been added to the IC Insider BUY RATED list. The list continues to sport selections that have some room to grow before they reach the stage of maturing. Some have reached levels that look like they may be close to the top and stay there for a while and the may be just be rated hold than BUY RATED at this stage of the market’s rally in Jamaica.
The Trinidad based companies appear to be saddled by the effects of the recession on their performance.
There are now a few that were previously listed as BUY RATED have moved to Watch, as these stocks are likely to be market underperformers. If these are already owned then investors may want to hold on a little longer, buying into them now, while such a move could be profitable such investment may not be the smartest move at this time. At this stage of the Jamaican market it has become more challenging to continue to back some of the strong performers to date, as their valuation has risen and future gains will most likely come from gain in profit, unless the market revalues the PE ratios higher, a factor that is expected with lower interest rates likely in the months to follow.
Knutsford Express has been to Market Watch as it close to our target price of $24 at this time and while there is more growth to come with increased frequency slated for the north coast routes, increased profits going forward could slow considerably from recent strong gains. Sagicor Group has done well since we selected it, with an increase close to 150 percent plus dividends, the immediate future looks like the gains are going to slow compared to the growth since the start of 2015. In past bull market, investors gave it a big premium over the rest of the market. That is not so now, but could change as the current bull market continues it run.
Lasco Distributors that was moved to a hold is now back to a buy, since the price has pulled back to $5, the company will benefit from taking over the overseas distribution of all of the manufacturing company products. The inflows expected from the lawsuit with Pfizer should add to the company’s value when the courts agree the amount, which management puts at more than US$300 million.
AMG Packaging, Caribbean Cream and Paramount are all up more than 300 percent but expansion into new products should give revenues and profit a kick in the not too distant future for AMG and Paramount. Caribbean Cream full year results are due shortly and should exceed 55 cents per share as the company benefited from sharp drop in raw material cost.
Jamaica Stock Exchange is now a Watch as it seems close to fairly valued currently, but dividend yield could well push it higher. In addition, of note is that while trading levels have improved they are still well off from historical highs, so there could still be much more gains ahead later on.
Trinidad is in recession and the results of companies are showing it with pressure on profit particularly for companies that earn the bulk of their income in the twin island state. As a result prices have been declining for many of the companies on the Trinidad market with a few exceptions. With the exception of Trinidad Cement that is undervalued, a hold has been placed on Trinidad based listed stocks for the time being but investors should wait for TCL to settle before buying.