The Jamaica Stock Exchange Main Market ended trading on Thursday, with the market declining after more stocks rose than declined, with investors exchanging 48 percent fewer shares than on Wednesday.
At the close, the All Jamaican Composite Index dropped by 223.64 points to settle at 401,551.48, the Main Index declined by 383.35 points to end at 366,312.01, the JSE Financial Index lost 0.10 points to settle at 95.85.
Trading ended with 41 securities changing hands compared to 40 securities on Wednesday and ended with the prices of 20 stocks rising, 11 declining and 10 remaining unchanged. The average PE Ratio of the market ended at 15.4 based on IC Insider.com’s forecast of 2020-21 earnings.
The market closed with an exchange of 18,091,098 shares for $52,570,216 compared to 34,870,786 units at $314,992,214 on Wednesday.
Radio Jamaica led trading with 10.03 million shares for 55.4 percent of total volume, followed by Wigton Windfarm with 2.21 million units for 12.2 percent of the day’s trade and Transjamaican Highway with 2.0 million units for 11.1 percent market share. Pulse Investments was the only other stock to exceed a million shares and ended with 1.56 million units changing hands.
Trading ended with an average of 441,246 units changing hands at $1,282,200 for each security, in comparison to an average of 871,770 shares at $7,874,805 at the close on Wednesday. The average trade for the month to date ended at 479,152 units at $2,702,302 for each security, in contrast to 482,123 units at $2,813,629. Trading month to date compares well, with a July average of 392,128 shares for $2,444,356.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading for the market shows six stocks ended with bids higher than their last selling prices and two with lower offers.
At the close of the market, Caribbean Cement fell 77 cents to settle at $42.50 and finishing trading of 8,842 shares, JMMB Group carved out a gain of 67 cents in ending at $30.70 after 55,121 stock units changed hands. Key Insurance declined by 30 cents in closing at $8.09 with investors swapping 4,549 stock units, Kingston Wharves gained $1 to close at $50 after trading at 4,058 shares, Mayberry Investments rose 39 cents to end at $6 and crossing the exchange, with 424,095 stocks. Mayberry Jamaican Equities advanced 46 cents to $8.75, after exchanging 250 shares, Palace Amusement rose $198 to settle at $1750, with 33 units clearing the market, PanJam Investment fell 50 cents in closing at $64.50 in an exchange of 1,366 shares. Proven Investments increased $1.83 to settle at $35.85 in exchanging 3,100 stocks, Seprod carved out a gain of 85 cents to end at $55, after 9,670 shares passed through the market and Wisynco Group increased 85 cents to end at $17.40 in exchanging 9,404 stock units.
In the preference segment of the Main Market, 138 Student Living Preference share declined by 90 cents to end at $5.98, ith 1,349 units changing hands.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
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, 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.
115% gain for IC TOP 10 winner
Caribbean Cream rose 115 percent from the end of June to the closed of the week, with the price ending at $5.30, up from $4, last week and along with General Accident that closed the week at $7.50 and gained 70 percent since the start of May, are out of the TOP 10. That is why it pays to follow IC Insider.
The two stocks sit just outside the TOP 10 with good potential to make further gains in the weeks and months ahead.
Coming back to the IC Junior Market TOP 10 are Lasco Distributors and Mailpac Group. Lasco Distributors profit is revised to 40 cents per share, for the current fiscal year, from 38 cents previously. The stock trades at a PE of 8 times earnings compared, with the average Junior Market PE over 11 and provides investors with the potential for substantial gains.
There was no change in the Main Market TOP 10 list for the week that saw the Main Market slipping modestly for the past week, while the Junior Market continued to inch higher, with a few points for the week, on top of gains in the previous two weeks.
The top three stocks in each market saw little change in the rankings, leaving the top three Junior Market stocks, with the potential to gain between 239 to 685 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Stationery and Office Supplies.
The top three Main Market stocks, with expected gains of 191 to 223 percent, are Berger Paints followed by Radio Jamaica and JMMB Group.
This week’s focus: Former IC TOP 10 candidate, Barita Investments reported strong results for the third quarter and nine months to June with profit after tax hitting $991 million in the latest quarter, up modestly from $911 million in 2019 and for the nine months profit of $2 billion, up from $1.4 billion in 2019. Earnings per share ended the third quarter at $1.21 and $2.45 for the year to date. The broker house seems set to come close to IC Insider.com projection for the full year of $3.75. The company declared a dividend of $2.216 per share payable on October 7, with an Ex-dividend date, of September 21.
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 at just 11.1, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising better profit opportunities the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks averages a mere 6.4 at just 58 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.3 or 55 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 257 percent, for the Junior Market and 149 percent for the JSE Main Market, based on 2020-21 earnings, an indication that there is the potential to make 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 gains 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.