Wednesday’s activity on the Jamaica Stock Exchange, resulted in the prices of 7 stocks rising and 7 declining as 21 securities changed hands, culminating in 1,774,287 units trading, valued at $11,185,286, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 9 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower.
Main Market| The JSE Market Index lost 478.38 points to 71,406.17 and the JSE All Jamaican Composite index declined 534.89 points to close at 78,553.31.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Caribbean Cement with 3,000 units, increased 1 cents to $2.13, Jamaica Broilers exchanged 3,350 shares, 5 cents higher at $4.05, National Commercial Bank saw trading in 459,910 shares as the price ended 39 cents higher to $17.90, Pan Jamaican Investment with 5,000 shares closed 10 cents higher to $49.10, Proven Investments with 414 shares added 0.99 cents to 18 US cents and Scotia Group had 10,400 shares changing hands, 4 cents higher to $19.11.
Firm| The stocks in the main market to close without a change in the last traded prices are, Carreras with 17,596 shares trading to close at $34.99, Gleaner with 140,883 units closed at $1.05 and Mayberry Investments traded 1,357 shares at $1.55.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Desnoes & Geddes in trading 14,000 shares at $4.79, slipped 1 cent, Jamaica Money market Brokers with 14,420 ordinary shares, closed 50 down at $7, Jamaica Stock Exchange with 592 units, lost 5 cents to end at $1.84, Kingston Wharves traded 98,465 units with a fall of $1.40 to close at $5.10 and Salada Foods with only 6,100 shares, closed with a 5 cents loss at $7.85.
Preference| Jamaica Money Market Brokers 8.75% preference share traded 1,067 units at $2.98 and Proven Investments 8% preference share traded 12,200 units at $5.
3 sevens clash again on JSE
Lasco Distributors disappoints, major expansion coming
Lasco Distributors reported disappointing results for the first quarter, for the 2015 financial year to June, with revenues crawling up 4 percent to $2.4 billion and profit dropping 45 percent to $91 million from $164 million in 2013.
Lascelles Chin Chairman of the company however, indicated to IC Insider that the company will be embarking on a major expansion which will include increased warehouse space to accommodate distribution of new products. Chin indicated that “the funds from winning the legal case against Pfizer Limited, will play an important role in funding the expansion”. The proceeds is expected to exceed well over J$1 billion. Already “Lasco have acquired a warehouse at a reduced price to what it originally cost to be assembled in Jamaica” Chin Indicated.
This June quarter performance is after the company took on the Salada Foods distribution. Margins on goods sold declined badly to 22.67 percent from 25 percent, while operating cost climbed by 20 percent from $302 million to $361 million. Earnings per share came in at 0.27 cents versus 0.49 cents in 2013.
“We planned for increased staff strength and marketing activities in preparation for pending new product rollouts. The current business environment with a devaluing dollar impacts the trade as there are continuous increases in prices and lower consumer spending power. The company continues to deploy measures to mitigate effects of the volatile market conditions and at the same time maintain its market positioning to provide overall value for consumers.
We continue to build our core portfolio and have several new products in the pipeline to ensure long term growth and profitability,” Peter M. Chin, Managing Director reported to shareholders.
Chin went on to state “total assets grew by 30 percent to $4.288 billion compared to $3.308 billion in the corresponding period last year. Property, plant and equipment grew by 59.7 percent to $313 million. This is primarily due to increased capacity and improvements in work flow processes in the distribution centres in preparation for new product launches.
Inventories increased by $331 million to $1.31 billion and this is mainly due additional inventory from new business agreements. Short Term Deposits increased by $80 million to $552 million and Cash and Bank Balances decreased to $285 million from $496 million. Trade and Other Receivables was at $1.598 billion, an increase of $400 million over the prior year. We continued with the arrangements to extend credit terms to our key institutions. There was also a related increase in Trade and Other Payables, an increase of $570 million to $1.76 billion.”
The company may have had a bad quarter but with plans for expansion and new products to be launched investors may want to be taking a look at the stock now that it’s been hit down to a low level with a view of benefitting when the profits rebound with additional sales to come from new products.
More stocks rise than fall on JSE
In Monday’s trading on the Jamaica Stock Exchange, the prices of 5 stocks rose and 4 declined. Only 18 securities changed hands, resulting in 4,848,981 shares trading, valued at $15,622,653.
Main Market| The JSE Market Index declined by 353.60 points, to 70,264.33 and the JSE All Jamaican Composite index moved down by 395.39 points, to close at 77,276.48.
Gains| Stocks recording gains at the end of trading in the main market are Gleaner with 11,000 units closed with a cent up, at $1.11 and Pan Jamaican Investment traded 56,790 shares to close with a gain of 48 cents, at $48.50.
Firm| There were only stocks in the main market to close without a change in price with shares closing, are Cable & Wireless traded 156,117 shares to close at 29 cents, Caribbean Cement with 500 traded closed at $2.20, Jamaica Broilers traded 154,589 shares but the price closed unchanged at $4.57, and Scotia Group with 68,506 shares closed at $18.40.
Preference| Jamaica Money Market Brokers 8.75% preference share 16,475 units to close at $3.03 and Proven Investments 8% preference share traded 2,700 units to close at $5.07.
Declines| The stocks that declined in the main market are Carreras had 80,000 units changing hands to close down 25 cents at $34.75, Jamaica Money Market Brokers with 628,736 shares, declined by 10 cents to close at $6.90, National Commercial Bank with 1,000 close at 50 cents lower at $17.50, Sagicor Group 8,172 close with a 10 cent loss at $8.99.
Junior Market| The JSE Junior Market Index declined by 17.39 points to close at 692.40 as 6 stocks traded with 3 advancing and none declining.
Gains| Stocks recording gains at the end of trading in the junior market are Consolidated Bakeries traded 558,953 shares to close with a gain of 10 cents to close at 80 cents, Lasco Distributors traded 1,000,000 units and gained 10 cents to end at $1.30 and Lasco Manufacturing had 25,000 units changing hands to close 10 cents higher at $1.10.
Firm Trades| The junior market stocks that traded to close at the same price as the day before, are Access Financial Services 10,759 units to close at $10, Blue Power with 27,000 units to close at $9.05, with Caribbean Cream traded 2042684 units at 70 cents each as investors responded well to the 79 percent jump in profits for the first quarter ended May.
Declines| No junior market stocks decline at the end of trading.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with the bids higher than their last selling prices and 2stocks with offers that were lower.
Lasco shares sell & buy FX or hold
Our response back then, thanks for your enquiry. As you will see our BUY RATED list contains these three stocks. Here are our views. First off the local stock market tends to go down around May until last June or July. This is not cast in stone, just a tendency. One reason for it is that investors get the full information as to what companies did last fiscal year and a glimpse for the new-year. In the case of the three Lasco companies they have just reported their full year results. The distributorship earning is the most encouraging of the three and looks like it will probably do better than the other three in the short to medium term. It will also benefit from the Salada Foods distribution which started this year, as well as from increased production to come from the expanded Lasco Manufacturing Company’s operation. The information suggest that the next set of results should possibly show growth over that of 2013.
Lasco Financial seems poised for good things but big marketing spend last fiscal year kept profits down as they went for more market share. It does look as if they will be spending on the world cup promotions which could build business, but may also keep profits pressured somewhat for a while.
Lasco Manufacturing seems cheap at $1 bearing in mind the impact that the factory expansion is likely to have on both sales and profits ultimately. Short term they will have to pick up interest cost and depreciation on the completed factory but will enjoy cost savings and ultimately increased profits.
It is my view that the market overall, is undervalued but investors will need to be patient and the payoff is likely to huge for those who wait, the gains to be reaped elsewhere is not likely to be all that great, to cause one to jump and possibly miss the gains in the local market that is ahead.