Scotia is back in ICTOP10

The Jamaica Stock Exchange had mixed results during the past week, with both the Junior Market and the Main Market closing slightly lower than at the close of the previous week and impacting the listings in varying degrees, resulting in the Main Market’s Scotia Group reentering the TOP10 at the expense of Radio Jamaica, with no Junior Market changes following the listing Regency Petroleum listing on Thursday and rising 75% in two days of trading.

Five Junior Market TOP10 stocks declined between one and 25 percent and just two gained one to 4 percent this past week, while the Main Market 10 had five rising and Three declining. 
In the Junior Market, Elite Diagnostic popped 4 percent to $3.03 as the sole main gaining stock, But Iron Rock Insurance dropped 25 percent to $1.80, followed by Caribbean Cream, down 17 percent and Dolphin Cove 6 percent to $13.35.
In the Main Market, Jamaica Broilers jumped 19 percent to $32, 138 Student Living rose 10 percent to $5.70 and Guardian Holdings followed with a rise of 9 percent to $575, but Key Insurance slipped 9 percent to $3.20.
At the end of the week, the average PE for the JSE Main Market TOP 10 is 5.6, well below the market average of 14. At the same time, the Junior Market Top 10 PE sits at 5.7 versus the market at 12, important indicators of the level of the undervaluation of the ICTOP10 stocks. The Junior Market is projected to rise by 256 percent and the Main Market TOP10, an average now of 270 percent, to May 2023.
The Junior Market has 14 stocks representing 30 percent of the market, with PEs from 15 to 33, averaging 19.5 compared with the above average of the market. The top half of the market has an average PE of 17 and shows the extent of potential gains that lie ahead 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 105, with an average of 32 and 23  excluding the highest valued ones and 21 for the top half excluding the highest valued stock.
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, helping to remove emotions in selecting stocks for investments that often result in costly mistakes.
IC TOP10 stocks are likely to 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.

Image Plus Consultants IPO looks attractive but…

Yet another company is heading to the Junior Market of the Jamaica Stock Exchange on the heels of the recent successful Regency Petroleum public issue that culminated in a listing on Thursday. The prospectus of Image Plus Consultants limited offers up to 247.89 million new ordinary shares at the price of $2 each, projected to raise $495,779,872 before expenses and to list on the Junior Market.
The issue will amount to 20 percent of the increased share capital of 1.2394 billion shares, up from 991.56 million currently issued. The offer values the company at $2.5 billion and that should rise to around $5 billion sometime after listing.
The issue opens on December 28 and is slated to close on January 11, but should close on the same date of opening or soon thereafter. Based on recent IPOS, if $5 billion goes into the Public allocation, investors can expect to get around eight percent of the offered amount.
Image Plus Consultants Services owns and operates the 25 years old Apex Radiology a Medical Imaging Company that was established in 1996.  Services provided include multiple modalities such as X-Ray, Ultrasound, CT Scan, Fluoroscopy and Nuclear Medicine at three locations in Kingston and one in Ocho Rios. The prospectus states that “With a view to growing at a faster pace, the Board took the decision to employ professional management experience and recruited a Chief Executive Officer in late January 2020. That step has resulted in very evident benefits demonstrated by the significant increases in patient cases, revenue and net profit margin over the last thirty months.”
Shareholders’ equity of $267 million in February 2022 was up 55 percent over the previous year and moved to $362 million in August. Profits before tax of $113 million increased 318 percent over the fiscal year to February 2021, representing the return of equity of 43 percent that flowed from revenues of $778 million which was up 10 percent over the prior year.
Total assets stood at $619 million at the end of August this year. Current assets ended the half year at $325 million and include receivables of $248 million that climbed from just $99 million at the end of August last year and from $139 million at the end of February this year. Current liabilities amount to $$124 million, while borrowed funds ended at $132 million.

Dr. Karlene McDonnough – Chairman of Image Plus Consultants Ltd.

Results to August show revenues and profits growing with revenues up 53 percent to $555 million from $363 million in 2021 with profit before tax of $153 million up 237 percent above the 2021 outcome of $45 million. Prior to the current year directors’ fees were paid at a higher rate than normal but are expected to reflect market rates going forward as a result the $66.5 million expensed in 2022 will drop sharply in the fiscal year 2023 and should result in a fall in administrative expenses.
“The Company intends to use funds raised to strategically and sustainably grow the business by acquiring property to be identified in Kingston which is suitable to relocate our largest operations, thereby ensuring control of our revenue and allowing for even further expansion of our offerings. Procuring suitable new bio-medical equipment to offer additional diagnostic modalities at our Ocho Rios location. Expand our offering of interventional procedures, maximizing this fast growing area of diagnostic imaging” the prospectus states.

The PE ratio will be just 7 times current year’s earnings and puts the stock in a strong position to move towards $6 during 2023. A comparison with Elite Diagnostic makes for interesting reading. While the reported profit is better for Image Plus, most other measures are in favour of Elite. The best comparison is EBITDA which shows Image with $152 million versus Elite with $190 million for the 2022 fiscal year. The interim figures annualized show Image with $359 million versus Elite with $220 million for the 2023 fiscal year. At $2 per share for the Image IPO, the stock is priced at 5.6 times EBITDA and Elite trades around 5.3 times. With three locations Elite net fixed assets amount to $885 million versus Image with $279 million and resulting in Depreciation charge being more than three times that of Image with four locations and higher finance costs as well.
If listed, the company would be the second such entity of the exchange following Elite Diagnostic. A successful IPO will raise the Junior Market listings to 48 and the total to list on that market to 52, including three that migrated to the Main Market and one that failed.
The board of directors is dominated by doctors in the medical profession and could do with some other directors with wide-ranging business experience. The directors are Karlene McDonnough, Lilieth Bridgewater, Gordon Bradshaw, Steve Lewis, Marian Vaughn and Leon Vaughn all medical-related doctors, Carolyn DaCosta, Jacqueline Leckie and Kisha Anderson.

Palace jumps to $1380, Regency at $1.75

As the 48th listing is heading for the Junior Market of the Jamaica Stock Exchange to fill the pockets of young investors, Regency Petroleum that was listed on the Junior Market on Thursday jumped 75 percent to $1.75 on Friday and seems poised to move higher when trading opens next week. At the same time, the Palace Amusement stock has come to life with the prospects of a stock split and hit a new 52 weeks’ intraday high of $1,699 but closed at $1,380 as the Main Market slipped from Thursday’s close and the Junior Market closed higher.
At the close of the market, the volume and the value of stocks traded rose well above that on Thursday.
At the close, the Combined Market Index dropped 744.44 points to 351,765.66, the JSE Main Index fell 1,031.70 points to 338,773.99, while the All Jamaica Composite Index lost 1,890.91 points to settle at 380,283.51, the Junior Market climbed 23.76 points to settle at 3,893.49 and the JSE US dollar market jumped 2.56 points to 231.39.
Trading ended, with 35,469,567 shares changing hands, for $120 million, versus $68.76 million, with 11,071,300 shares traded in all markets on the previous trading day. The JSE USD market ended with the value of stocks traded amounting to US$5,115 from US$5,493 on Thursday.
The market’s PE ratio ended at 23 based on 2021-22 earnings and 13 times those for 2022-23 at the close of trading.
Investors need pertinent information to successfully navigate many investment options in the local stock market. The ICInsider.com PE ratio chart and the more detailed daily report charts provide investors with regularly updated information to help decision-making.
Investors should use the chart to help make rational investment decisions by investing in stocks close to the average for the sector and not going too far from it unless there are compelling reasons to do so. This approach helps to remove emotions from investment decisions and put in on fundamentals while at the same time not being too far from the majority of investors. Investors who buy when the price of a stock is close to the average will find that they are not inclined to overpay for a stock.
The ICInsider.com PE Ratio chart covers all ordinary shares on the Jamaica Stock Exchange. It shows companies grouped on an industry basis, allowing easy comparisons between the same sector companies and the overall market.
The net asset value of each company is reported as a guide to assess the value of stocks based on this measure quickly. The chart also shows daily changes in stock prices and the percentage year to date price movement based on the last traded prices. Dividends payable and yields for each company are shown in the Main and Junior Markets’ daily report charts that show the closing volume for the bids and offers.
The EPS & PE ratios are based on 2021 and 2022 actual or projected earnings, excluding major one off items. The PE Ratio is the most popular measure used to determine the value of stocks.

 

Image Plus Consultants the next IPO

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Yet another company is heading to list on the Jamaica Stock Exchange and is coming on the heels of Regency Petroleum that was listed on Thursday. Image Plus Consultants Limited announced its intention to go public and that seems imminent with the Junior Market seems the most likely target.
Image Plus Consultants Services owns and operates the 25 years old Apex Radiology a Medical Imaging Company that was established in 1996.  Services provided include multiple modalities such as X-Ray, Ultrasound, CT Scan, Fluoroscopy and Nuclear Medicine at three locations in Kingston and one in Ocho Rios.
According to an advertisement in the newspapers, shareholder’s equity stood at $267 million in February 2022 and was up 55 percent over the previous year, with profits before tax of $113 million that increasing by 318 percent over 2021, representing the return of equity of 43 percent that flowed from revenue of $778 million which was up 10 percent over the prior year. Total assets amounted to $447 million at the end of February this year.
Based on the profit, the company’s market value is just over $2 billion after the shares are listed.
If listed the company would be the second such entity of the exchange following Elite Diagnostic. A successful IPO will raise the Junior Market listings to 48.

Palace more than doubles, Regency gains 32%

Palace Amusement jumped just over $268 on Thursday to $1,354.75 and has risen 118.5 percent since Monday in response to a proposed stock split. Elsewhere, the recent IPO, Regency Petroleum was listed on the Junior Market and traded at $1.32 for a gain of 32 percent and closed with the bid for 3.6 million shares at 41.32. At the close of the market, the volume and value of stocks traded declined from that on Wednesday.
The Main Market of the Jamaica Stock Exchange recorded gains in the market indices but the Junior Market and JSE USD markets dipped at the close.
At the close, the Combined Market Index popped 480.40 points to 352,510.10, the JSE Main Index gained 850.19 points to 339,805.69, the All Jamaica Composite Index rallied 1,068.13 points to 382,174.42, the Junior Market lost 34.08 points to close at 3,869.73 and the JSE US dollar market dipped 0.13 points to 228.96.
Trading ended, with 11,071,300 shares changing hands, for $68.76 million, versus $266.2 million, with 12,607,683 shares traded in all markets on the previous trading day. The JSE USD market ended with the value of stocks traded amounting to US$5,493 from US$5,795 on Tuesday.
The market’s PE ratio ended at 22.6 based on 2021-22 earnings and 12.8 times those for 2022-23 at the close of trading.
Investors need pertinent information to successfully navigate many investment options in the local stock market. The ICInsider.com PE ratio chart and the more detailed daily report charts provide investors with regularly updated information to help decision-making.
Investors should use the chart to help make rational investment decisions by investing in stocks close to the average for the sector and not going too far from it unless there are compelling reasons to do so. This approach helps to remove emotions from investment decisions and put in on fundamentals while at the same time not being too far from the majority of investors. Investors who buy when the price of a stock is close to the average will find that they are not inclined to overpay for a stock.
The ICInsider.com PE Ratio chart covers all ordinary shares on the Jamaica Stock Exchange. It shows companies grouped on an industry basis, allowing easy comparisons between the same sector companies and the overall market.
The net asset value of each company is reported as a guide to assess the value of stocks based on this measure quickly. The chart also shows daily changes in stock prices and the percentage year to date price movement based on the last traded prices. Dividends payable and yields for each company are shown in the Main and Junior Markets’ daily report charts that show the closing volume for the bids and offers.
The EPS & PE ratios are based on 2021 and 2022 actual or projected earnings, excluding major one off items. The PE Ratio is the most popular measure used to determine the value of stocks.

 

About 5.3% of Regency IPO shares for the Public

Initial public share issues continue to disappoint many investors, with investors in the Regency Petroleum issue allocated the first 10,000 shares applied for plus approximately 5.3% thereafter, a release from the lead broker, GK Capital Management, stated. 
Strategic Partners, Employees and applicants converting loans got a full allocation of amounts applied for, the report also indicated.
Applications in the general pool with the same JCSD number were consolidated and treated as one.
The prospectus indicates that listing of the shares is expected to take place within 21 days of the closing of the issue, with ten days elapsing since the issue closed on November 25, the listing should take place before the end of next week.
A total of 287,157,354 Ordinary Shares were for sale at $1 each, with only 115,196,354 shares that were available to the public.

Regency IPO opens on Thursday for a $1

Regency Petroleum Co. Limited a company based in Westmoreland is offering up to 287,157,354 Ordinary Shares for sale at $1 each. The offer opens on Thursday, November 24 and should bring the total Junior Market listings to 48 and the number of companies to 47. Only 115,196,354 shares will be available to the public.
The company reported revenues of $332 million in the half year results to June this year, up from $248 million in 2021, with profit after tax of $51 million compared with $35 million in 2021, putting the earnings per share for this year at 98 cents, with the PE at 10 times this year’s pretax earnings versus the Junior Market average of just over 12, but below the peak of recent new issues of approximately 20. ICInsider.com expects the offer to close quickly after opening and the price to soar into the $2 range after listing.
Revenues for the 2021 fiscal year were $607 million a big jump from $194 million in 2020 and just $45 million in 2019, with a profit of $59 million in 2021, after taxation of $18 million, up from $14 million with taxation of $3 million in 2020.
The company’s operations span Jamaica as a petroleum marketing company licensed to distribute bulk petroleum products. The company was founded by Andrew Williams, Chief Executive Officer. Revenues are currently generated from sales of LPG Cooking Gas, Automotive Petroleum and Transportation of gasoline.
Revenues are set to climb in 2023 with the ongoing construction of two service stations which should be open to the public by the end of the March quarter of next year, the company stated in its prospectus. A service station to be opened in Negril, which Regency will lease, is located upon entering the town from the east, will increase the visibility of the brand and generate additional revenues and profit. In addition, the company is likely to see increased business due to the exposure from the IPO and trading in the shares after listing on the exchange.
The company states that it has purchased delivery vehicles to reduce costs and improve efficiency and create greater economic value in the future. Currently, only 90 Octane Fuel and Diesel are sold at the service station, the opening of the new service stations will see the introduction of ULSD and 87 Octane Fuel at the pumps. The new products should attract added demand and provide a more inclusive retail market product line.
Expansion plans call for the purchase of additional cylinders to supply increased demand for its cooking gas to reduce cost of sales and improve efficiency, the Company will also acquire a fuel tank trailer, the prospectus states.
Of the total issue 171,961,000 shares are reserved as follows – 55.5 million for Employees & Key Strategic Partners, 100 million for GK Investments to convert loan balance and 16.46 million for Associates Loan Conversion.
The company is relatively small, with Shareholders’ Equity of $111 million at the end of June this year, accordingly, there is much room for growth going forward.
The directors of the company are Dr André Foote, Andrew Williams, Andrew Cocking, Radcliff Knibbs and Edgar Bennett.

Regency, Lasco Financial &138SL Stocks to Watch

Regency Petroleum is added to the Stocks to Watch following the release of its prospectus On Thursday with an issue price of $1, with the possibility of the price hitting over $2 initially. Palace Amusement is dropped for the time being with the company reporting improved results in the September quarter but still ending with a loss, but investors should be on the lookout for good things from the stock in the future as it continues to make headway to recovery.
Barita Investments and Consolidated Bakeries are removed from the list at this time with recent results suggesting that they are unlikely to move higher in the short term.
ICInsider.com watch list comprises Access Financial, Caribbean Assurance Brokers, Dolphin Cove, Caribbean Producers, Elite Diagnostic, Everything Fresh, General Accident, Guardian Holdings, Jamaica Broilers, Key Insurance, Knutsford Express, Lasco Distributors, Lasco Financial, Lasco Manufacturing, Medical Disposables, NCB Financial, 138 Student Living, One on One, Paramount Trading, Regency Petroleum, Scotia Group, Stationery and Office Supplies and Wisynco.
Major factors to consider going forward. The rebound in tourist arrivals only came back to 2019 levels since June. Providing there are no reversals, then companies who are highly dependent on the sector will enjoy a big bounce for the next nine months compared to the lower business generated since last year to April this year. The same applies to the entertainment industry as the sector only opened up after March this year. Banks will make a fortune from increased interest rates.

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

Regency IPO opens next week

Another Junior Market listing now looms on the horizon with Regency Petroleum Co. Limited based on Westmoreland offering up to 287,157,354 Ordinary Shares for sale at $1 each. The offer opens on Thursday, November 24 and should bring the total junior Market listings to 48 and the number of companies to 47.
Only 115,196,354 shares will be available for subscription by the public, with the rest of 171,961,000 shares reserved as follows – 55.5 million for Employees & Key Strategic Partners, 100 million for GK Investments to convert loan balance and 16.46 million for Associates Loan Conversion.
The company half year results to June show revenues of $332 million up from $248 million in 2021 with profit after tax of $51 million versus $35 million in 2021 and put the earnings per share for this year at 98 cents, with the PE at 10 times this year’s pretax earnings versus the Junior Market average of just over 12, but below the peak of recent new issues of 15 to 20. ICInsider.com expects the offer to close quickly after opening.
Revenues in 2021 amounted to $607 million compared with $194 million in 2020 and just $45 million in 2019, with a profit of $59 million in 2021 after taxation of $18 million up from $14 million with tax or $3 million in 2020.
The company’s operations span Jamaica as a petroleum marketing company licensed to distribute bulk petroleum products. The company was founded by Andrew Williams, Chief Executive Officer. Revenues are currently generated revenue from sales of LPG Cooking Gas, Automotive Petroleum and Transportation of gasoline.
Shareholders’ Equity amounts to $111 million at the end of June this year.