Adage has it that markets know best, but the performance of Cargo Handlers profit performance and stock price movements put the concept in greave doubt. The company reports lower revenues and profit for the June quarter this year compared to 2016 while the stock price tanked from serious overvaluation.
Profit for the nine months, dipped to $116 million from $124.5 million in 2016 after tax, even as revenues climbed from $234 million to $255 million. For the June quarter revenues fell to $74 million from $81 million in 2016 and profit after tax dropped sharply by 32 percent, from $46 million to $31 million. Earnings per share ended at 8 cents for the quarter and 31 cents for the nine months, for the full year earnings should end around the 40 cents range. Such earnings would put the price earnings ratio at a very high 33 and the stock price at great risk of falling.
In 2016, the company earned $6.3 million in other income in the June quarter with gains of $2.2 million in foreign exchange earnings in 2017, for the quarter and year to date and $3.4 million versus $10.5 million for the nine months to June last year. While revenues fell in the June quarter, compared to 2016, operating expenses jumped $5 million to $35.4 million and $20 million for the nine months to $112 million. $7 million of the increase, management reported, is due to “adjustments to some vessels’ rescheduling.” Management also stated that “the petroleum division will in the ensuing quarter begin to introduce newly acquired equipment that will give us the capacity to comfortably service additional business.”
The company’s is strong financially, with cash on hands of $237 million, current liabilities of just $25 million and shareholders’ equity of $366 million and generated cash flows from operations of $137 million for the nine months period.
An interim dividend of 11 cents per stock unit was declared by the directors to be paid on September 8.
Montego Bay is said to be the fastest growing region in Jamaica currently, if the pace continues, should provide the company will a solid base for growth. The big concern now is the need for the stock price to adjust downwards to mirror the values in the rest of the market. The stock peaked at $30 earlier this year and last traded at $13.20. It is going to take a few years for those who bought at the top of the market to recover their investment and opportunity cost expended on it. Cargo Handler is not a recommended buy currently.
Profit drops at Cargo Handlers
August 7, 2017 by
Profit climbs 31% at Cargo Handlers
February 15, 2017 by
Overvalued Cargo Handlers.
The company recorded earnings per share of`12 cents for the quarter which is in line with IC Insider.com’s forecast of 55 cents, for the full year. “Increased passenger vessel traffic coupled with the seasonal increases in containerized cargo, pushed revenues to $91.1 million,” management stated in their report accompanying the results. While revenues grew quite strongly, cost also grew, with operating cost rising in line with revenues by 33.5 percent to $33.5 million and administrative expenses climbing by 36 percent to $4.5 million.
Gross cash flow, generated in the quarter was $52 million, increased receivables and reduction in payables help to reduce the net flows for the quarter to just $6 million, but still ending with a healthy cash position of $232 million at the end of the year. Receivables ended the year at $86 million and current liabilities at just $27 million.
Montego Bay is one of the fastest growing regions in Jamaica, with increasing tourism and BPO activities and more expansion in these areas to come. The port is likely to be used as the centre for exporting of LNG to the Eastern Caribbean, Cargo Handlers should benefit from the growth in the area down the road. Cargo Handlers last traded on Tuesday at $24.50 for a rich PE of 45, based on IC Insider.com’s forecast of 55 cents per share.
The company is slated to pay an interim dividend of 13.5 per stock unit on March 21.
21 stocks fell 9 rose & 4 new highs
May 14, 2015 by
Mayberry traded 2.7 million shares to close at $2.88.
The number of securities trading on Thursday is by far the largest, since IC Insider has been reporting from 2013. At the close, JSE Market Index gained 404.52 points to 99,499.43, the JSE All Jamaican Composite index rose 452.29 points to close at 109,963.28, after trading over 110,000 points during the day and the JSE combined index gained 356.44 points to close at 101,656.34.
There were 4 stocks closing at 52 weeks’ high in the entire market.IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 8 stocks with bids higher than their last selling prices and 5 with offers that were lower.
Stocks trading include, Barita Investments closed trading with 151,783 shares to end 11 cents lower at $2.26, Berger Paints had 9,858 shares trading with a gain of 8 cents to a 52 weeks’ high of $2.08, Cable & Wireless lost altitude by dropping 2 cents in trading 723,882 units, to end at 46 cents. Caribbean Cement trading 315,244 shares with the price falling to $4.20 rising back to $5, Desnoes & Geddes closed at $7.10 with 15,300 units trading, Grace Kennedy traded 106,525 shares to close down by 50 cents at $64.50 after trading as high as $65.25. The stock is unlikely to get any help in trading for the next few days as they reported lower profits in the March quarter with profit of $589 million versus $833 million in 2014. Hardware & Lumber traded just 1,750 shares to lose 25 cents to $10.75, Mayberry Investments traded 2,735,521 units up $3 but fell back to closed at $2.88, All the Mayberry shares were purchased through Mayberry Investments,
with JMMB Securities virtually all units with most being sold from JMMB inventory and bought by Mayberry for in house purposes. National Commercial Bank closed with a 51 cents loss with 92,298 shares trading to close at $30.50, Sagicor Group had just 14,630 shares trading at $12.15. Sagicor Real Estate Fund gained 68 cents with 9,427 shares trading, to end at $7.28, following first quarter report showing a big jump in profit to $570 million, from $242 million, in 2014, as the acquisition of a hotel in Montego Bay pumped up revenues and profit in the quarter, in the best period for income in the hotel sector. Salada Foods gained 25 cents with just 2,672 shares trading at $9.25, Scotia Investments ended shedding 25 cents while trading 2,150 shares to end at $24.75, Seprod ended with 120,515shares trading at $18.25 and Proven Investments had 5,000 shares trading to close at an all-time high of 21.25 US cents.
