Investors’ attention turned to the Junior Market in both 2020 and 2021 as that market provided better values for stocks and therefore greater opportunities to make higher profits. Projected earnings of the listed companies suggest that the situation is unlikely to change in 2022.
The Main Market of the Jamaica Stock Exchange eked out a modest gain of 1.1 percent in the All Jamaica Composite index at the end of 2021, the index was 21.7 percent lower than the end of 2019.
The PE for the Main market is 14 times 2022 earnings compared to 16 based on 2021 earnings, that does not suggest a big uptick for the market with just a 14 percent increase expected in 2022 over 2021 that would push the index to 499,694 points, still well below the 559,853.26 points the market closed out 2019 at.
There are several stocks in the market, data suggest could more than double in 2022 and investor would be wise to not only pay attention but pick up some of these undervalued stocks in preparation for long term growth as the Jamaican economy rebounds and move into a new stage of long term positive growth that a number of these companies will benefit from.
Banks could be amongst the big performer as they shed the need for continued heavy provisioning of loans as well as grow their book of loans to deliver more income to profits. Added the increase in interest rates will help improve their net interest income.
ICInsider.com data indicates that there are 8 stocks that can double in the Main Market in 2022 into early 2023. 2021 finished with several stocks trading at or above 20 times earnings in the Main Market if that level of valuation continues into 2022 and is more widespread, then the gain in the market could exceed the above potential gains. In the final analysis, the market index is just a simple measure as to how the overall market is doing. It comes down to individual stocks that can do well and that is the case for ICInsider.com TOP15 stocks.
3 new ICTOP10 listings as Spur Tree exists
The Junior Market ICTOP10 stocks have three new listings in a week that saw Spur Tree Spices trading for the first time on Friday with the price climbing to $1.32 for a rise of 32 percent since the Initial Public offer at the end of 2021, there are no new Main Market listings.
Other stocks that were in the spotlight this past week were ones that lasted off to record new all-time highs and include AMG Packaging, Caribbean Assurance Brokers, Caribbean Producers and Dolphin Cove a TOP10 contender up to the week ending December 2, also hit a 52 weeks’ high of $23.50 this past week to be up more than 100% since it came into the top flight in August last year at $9.86.
With the rise in the price of Spur Tree Spices, the stock is one of four to move out of the TOP10, followed by Medical Disposables that 16 percent for the week and Caribbean Cream that reported terrible third quarter results with a loss being made in the period as revenues climbed 14 percent in the quarter. Coming into the TOP10 are Lumber Depot, Fontana and General Accident.
Junior Market, AMG Packaging rose a strong 45 percent, ahead of the first quarter results to November that showed profit after tax jumping a big 146 percent over 2020. Investors can expect more gains to come this coming week as the stock traded up $3.90 last week. Caribbean Assurance Brokers climbed to a new 52 weeks’ high during the week and closed $3.12 up 26 percent, Access Financial Services continues to seesaw and recovered 17 percent to $20 this past week and Elite Diagnostic gained 8 percent to $3.18.
The sharp price movements in the Junior Market reduced the potential gains markedly, with the average gains projected for the TOP 10 Junior Market stocks now 122 percent versus 148 percent last week.
The top three stocks are Access Financial Services followed by Lasco Distributors and Caribbean Assurance Brokers can gain between 124 and 160 percent, sharply down from 182 and 204 percent, previously.
Major Main Market TOP10 moving stocks are Caribbean Producers up 7 percent, to $15.99 and Radio Jamaica rallying 7 percent to $3.45 as increased buying interest came in for the stock.
The potential gains for Main Market stocks moved from 146 percent to this weeks’ 144 percent this week, with top three Main Market stocks being Guardian Holdings followed by JMMB Group and Radio Jamaica all projected to gain between 161 and 257 percent up from 199 and 258 percent last week.
The Junior Market closed the week, with an average PE of 14.7 based on ICInsider.com’s 2021-22 earnings and is currently well below the target of 20 and the average of 17 at the end of March this year based on 2020 earnings. The TOP 10 stocks trade at a PE of a mere 9.1, with a 38 percent discount to that market’s average.
The Junior Market can gain 36 percent to March this year, based on an average PE of 20 and 16 percent based on an average PE of 17. Eleven stocks representing 26 percent of all Junior Market stocks with positive earnings are trading at or above this level averaging 25.
The average PE for the JSE Main Market is 16.4, just 16 percent less than the PE of 19 at the end of March and 22 percent below the target of 20 to March 2022. The Main Market TOP 10 average PE is 8.5 representing a 48 percent discount to the market and well below the potential of 20. A total of 14 stocks or 30 percent of the market trade at or above a PE of 19, with most over 20, for an average roundabout 25, suggesting that the accepted multiple is between 20 and 25 times the current year’s earnings.
ICTOP10 focuses on likely yearly winners, accordingly, the list may or may not include the best companies in the market. ICInsider.com ranks stocks based on projected earnings to highlight winners from the rest, allowing investors to focus on potential winning stocks and helping to remove emotional attachments to stocks that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to March 2022 and ranked in order of potential gains, based on the possible increase for each company, considering the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in weekly movements in and out of the lists. 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.
ICTOP10 scaling new highs
Main Market TOP10 stock, Sagicor Group price fell to $52.31 to return to the TOP10 after closing the previous week at $58 and replaced by Scotia Group that slipped from $36 to $35.50 as both the Main and Junior Markets displayed some bullish signs in the past week, with Caribbean Producers hitting a record high of $15 and gained 436 percent in just over a year.
Other big news for the week was the continued rise of ICTOP10 Main Market stock, Caribbean Producers that closed the week with a gain of 15 percent at a record high of $15 and is now in the sixth spot with the potential to gain another 120 percent in months. Radio Jamaica rose 7 percent for the week to $3.23 and Guardian Holdings rose 5 percent.
Junior Market AMG Packaging rose 6 percent but could climb higher with the first quarter results to November, due this coming week and the company is also expected to announce a dividend. Lasco Financial put on 7 percent to land at $3.20, Elite Dynastic gained 4 percent to $2.95, Caribbean Assurance Brokers climbed as high as $2.75 during the week but closed down at $2.48 for a 3 percent gain, and Access Financial Services fell 10 percent to $17.08 and Lasco Distributors lost 6 percent to $3.20.
Elsewhere, investors in the Spur Tree Spices Initial Public offer will receive just over 11.76 percent of the shares they applied for in the heavily oversubscribed issue that is sure to drive the stock price with a big bang in the first week of trading which should be ahead of the end of January.
The top three Main Market stocks, this week are Guardian Holdings followed by JMMB Group and Radio Jamaica all projected to gain between 199 and 258 percent up from 183 and 261 percent last week.
The Junior Market’s top three stocks for the week are Access Financial Services followed by AMG Packaging and Caribbean Assurance Brokers. All three can gain between 182 and 204 percent versus 174 and 218 percent, previously.
The average gains projected for the TOP 10 Junior Market stocks is 148 percent and Main Market stocks moved from 152 percent to this weeks’ 146 percent.
The Junior Market closed the week, with an average PE of 14.8 based on ICInsider.com’s 2021-22 earnings and is currently well below the target of 20 and the average of 17 at the end of March this year based on 2020 earnings. The TOP 10 stocks trade at a PE of just 8.2, with a 45 percent discount to that market’s average.
The Junior Market can gain 35 percent to March this year, based on an average PE of 20 and 15 percent based on an average PE of 17. Ten stocks representing 26 percent of all Junior Market stocks with positive earnings are trading at or above this level and averaging 25.
The average PE for the JSE Main Market is 16.4, just 16 percent less than the PE of 19 at the end of March and 22 percent below the target of 20 to March 2022. The Main Market TOP 10 average PE is 8.4 representing a 49 percent discount to the market and well below the potential of 20. A total of 14 stocks or 30 percent of the market trade at or above a PE of 19, with most over 20, for an average roundabout 25, suggesting that the accepted multiple is between 20 and 25 times the current year’s earnings.
ICTOP10 focuses on likely yearly winners, accordingly, the list may or may not include the best companies in the market. ICInsider.com ranks stocks based on projected earnings to highlight winners from the rest, allowing investors to focus on potential winning stocks and helping to remove emotional attachments to stocks that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to March 2022 and ranked in order of potential gains, based on the possible increase for each company, considering the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in weekly movements in and out of the lists. 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.