115% gain for IC TOP 10 winner

August 9, 2020 by

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.

Caribbean Cream gained 115% since the end of June

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.

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Lasco out Medi Disposables back in IC TOP 10

August 2, 2020 by

Lasco Distributors rose from $2.85 to close at $3.25 after the company posted a 57 percent rise in first-quarter profit and Medical Disposables returns with the stock finding support just under $5 this past week after posting disappointing full-year results at the end of the prior week.
There was no change in the Main Market TOP 10 list for the week that saw the Main Market remaining relatively stable for the past week, while the Junior Market rose 35 points for the week on top of gains in the previous week.
Although Lasco Distributors is out of the TOP 10, investors should expect to see more gains, with the EPS of 38 cents for this fiscal year, as the stock trades at 8.7 times earnings compared with 11.2 for the Junior Market. Caribbean Cream reported good first-quarter results, suggesting a significant increase in full-year profits. The stock closed the week at $4, up from $3.65, and is poised for more gains in the weeks to come. There are limited offers to sell the stock while buying interest has picked up.
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 695 percent by March 2021. The first is Caribbean Producers, followed by Lasco Financial and Stationery and Office Supplies.
The top three stocks in the Main Market, with expected gains of 182 to 233 percent, are Berger Paints followed by Radio Jamaica and JMMB Group.

Grace Kennedy new headquarters in downtown Kingston

This week’s focus: Grace Kennedy posted revenues of $56.5 billion, up 10 percent over the corresponding period of the prior year. Profit before tax was $4.5 billion, reflecting a 53 percent improvement over the same period in 2019. Net Profit after tax increased 36.5 percent to $2.75 billion after minority interest, with earnings per stock unit for the period of $2.77. The result to date is outstanding, projected earnings for 2021 is over $11 per share, putting the stock in the category of one of the best buys in the Main Market currently. IC Insider.com has upped its forecast for 2020 per share to $7.25, with a PE ratio of 8 at the closing stock price of $57.
QWI Investments just released its June quarter results, with a loss of $461 million for the year to date and a profit of $115 million in the latest quarter. The company’s portfolio comprises a mix of stocks mainly in Jamaica and the USA, with a smattering in Trinidad. At the end of July, the net asset value (NAV) continued to increase and ended the month at $1.06, up 11.5 percent from 95 cents at the end of March this year. The performance beats the JSE Main Market index that is down 2.5 percent over the same period and the JSE Combined Index down one percent for the same period. The NAV growth that reflects changes to the investment value plus dividend income after expenses is just behind the JSE Junior Market index that is up 12.4 percent over the same period. The stock price closed at 73 cents on the local market on Friday, at a steep discount of 41 percent to the net asset value.
Access Financial reported a first-quarter profit after tax to June of $33 million, compared to $165 million for the similar period in 2019 after additional provision for loan losses amounting to $67 million and loan write-off of $38 million. Income slipped as loans contracted, but the cost in some areas fell. The company is sound and is poised to return to higher levels of profit, and could even reverse some of the loan loss provisions going forward.
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 14.9 and the Junior Market at just 11.2, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising and narrowing the gap, with the Main Market as investors see better profit opportunities in this sector. The PE ratio for the Junior Market Top 10 stocks averages a mere 6.3 at just 56 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.1 or 55 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 261 percent, for the Junior Market and 153 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 gain 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.

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General Accident in IC Top 10 Mailpac out

July 25, 2020 by

The price of General Accident dipped to $6.65 at the close of the week, from $7, last week and now returns to the IC Insider.com Junior Market TOP 10, replacing Mailpac Group, with the price moving from $2.01 at the end of the previous week to close this week at $2.14.
There was no change in the Main Market TOP 10 list for the week that saw the Main Market stocks lopping 6,300 points off the market index while the Junior Market rose 26 points.
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 682 percent by March 2021. The first is Caribbean Producers, followed by Lasco Financial and Stationery and Office Supplies, a new entry in the third position.
The top three stocks in the Main Market, with expected gains of 186 to 208 percent are, Radio Jamaica followed by Berger Paints and JMMB Group.
This week’s focus: Seprod posted a 136 percent rise in profit to $568 million, for earnings per share of 77 cents, for the second quarter to June and 117 percent for the six months to $1.2 billion. Profit from continuing operations grew at a slower pace at 38 percent for the second quarter and 41 percent for the half-year. Revenues increased 18 percent to $9.5 billion for the June quarter and 12 percent to $18.6 billion for the six months. The company shuttered its loss-making sugar operations last year and that is helping with the improvement in results.
The stock is well outside the TOP 10, but the company is one of the top performers on the market before the move into sugar production. With its focus on exports and new ventures, the future looks bright for it. The stock is an excellent long-term investment and is likely to record some gains during the rest of 2020. IC Insider.com is projecting $4 per share earnings for the current year and it now trades at a PE ratio of 14, with limited upside potential in the short term.
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. The JSE Main Market ended the week, with an overall PE of 14.8 and the Junior Market at just 11.3, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising and narrowing the gap, with the Main Market as investors seem to see better profit opportunities in this sector. The PE ratio for the Junior Market Top 10 stocks averages a mere 6 at just 53 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.4 or 57 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 269 percent, for the Junior Market and 146 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 some of the best returns, up to March 2021. The projected gain for each stock takes into account the earnings and PE ratios for the current fiscal year. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. 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.

Filed Under: Buy Rated Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , ,

Another IC Top 10 stock with big jump

July 19, 2020 by

A few weeks ago General Accident jumped the IC Insider.com Junior Market TOP 10, gaining 75 percent since late May. This past week, yet another IC top 10 listed stock made big gains, after the company posted a strong increase in its first-quarter profit.

Caribbean Cream posts big gains in profit in Q1.

Elsewhere, poor full-year profit results of $58 million versus $113 million in 2019, from Medical Disposables, hit with a big inventory write-off, resulted in a revised downward projection for the 2021 fiscal year results. Lumber Depot earnings for fiscal 2021, was revised to 12 cents per share, following released audited accounts, showing a profit of just 3 cents per share or $22 million for the nine months to April.  
This week’s focus: Caribbean Cream posted a 31 percent rise in profit to $27 million, for earnings per share of 7 cents, saw investors responding strongly to them in driving the stock 28.5 percent higher at its recent peak on Friday, closed the week at $3.25, for an increase of 16 percent. The stock traded down to $2.47 at the beginning of July, those who bought at that price are laughing all the way to the bank with a nice 31 percent gain so far and the month is yet to end.
The company reported a 4 percent rise in sales, with cost kept to 2019 levels, even with a big hike in depreciation charges, while sales and market expenses declined. IC Insider.com is projecting 60 cents per share earnings for the current year as the company enjoys increase sales and lower raw material input cost with the price of milk solids falling on the world market, recently. There are just about six offers on the stock exchange board at the close on Friday with the lowest offer at $4.30 and the only large visible offer for 500,000 shares at $6.
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 268 to 679 percent by March 2021 are Caribbean Producers, followed by Lasco Financial and Caribbean Cream in the third position. Lasco Financial came out with lousy audited profit to March but the results included a big $650 million loss provision for impaired loans. Excluding this provision, the profit would have spiked nicely for the year. Investors should watch the current year for early signs of profit recovery. Caribbean Cream’s latest results demonstrate how powerful recovery situations can be for investors.
The top three stocks in the Main Market, with expected gains of 189 to 210 percent are Radio Jamaica followed by Berger Paints and JMMB Group that reported decent full-year March results.
During the early summer months, the local market tends to move sideways as trading recedes from more robust levels. Investors should keep their eyes on the market less they miss good opportunities, as is the case in the near 75 percent rise in the price of General Accident since May 7 and Caribbean Cream. No doubt, there will be others before summer ends.
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. The JSE Main Market ended the week, with an overall PE of 15 and the Junior Market at just 11, based on IC Insider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising and narrowing the gap on the Main Market as investors seem to see better profit opportunities in this sector. 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 8.5 or 56 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 272 percent, for the Junior Market and 144 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 some of the best returns up to March 2021. The projected gain for each company’s stock is computed, by using the earnings and PE ratios for the current fiscal year. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. 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.

Filed Under: Buy Rated Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , ,

NCB is out of IC Top 10

July 13, 2020 by

After entering IC Insider.com Main Market TOP 10 last week, NCB Financial Group is out of the top 10 and replaced by Victoria Mutual Investments. These two stocks are the only movement in and out of the TOP 10 for the week. There is no change to the Junior Market TOP 10.
Although the Main and Junior Markets declined during the week, the top three stocks in each market saw little change in the rankings. Accordingly, the top three Junior Market stocks, with the potential to gain between 292 to 666 percent by March 2021 as Caribbean Producers, followed by Lasco Financial and Lumber Depot in the third position. In the Main Market, the top three stocks are Berger Paints, followed by Radio Jamaica and JMMB Group, with expected gains of 195 to 208 percent.
During the early summer months, the local market tends to move sideways as trading levels recede. Investors should not keep their eyes off the market as excellent opportunities can bypass them. A good case is the near 75 percent rise in the price of General Accident since May 7 when the stock traded at $4.02.
The targeted average PE ratio of the market is 20 based on profits of companies reporting full year’s results for the financial year ending after the second quarter of 2020, up to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level. The JSE Main Market ended the week, with an overall PE of 15.2 and the Junior Market at just 10.6, based on IC Insider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks averages a mere 5.5 at just 52 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at 8.4 or 55 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 293 percent, for the Junior Market and 146 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 some of the best returns up to March 2021. The computation of projected gains is based on earnings and PE ratios for the current fiscal year for each stock. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. 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.

Filed Under: Buy Rated Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , ,

NCB is back IC Top 10

July 6, 2020 by

NCB Financial Group is back IC Insider.com Main Market TOP 10 stocks as the price slipped slightly by the end of the week to $135.90. There were no changes to the Junior Market TOP 10 lists.
This week’s focus:  NCB shares have been under selling pressure, with the group reporting lower second-quarter profit than the prior year and concerns about losses that can occur from their loan portfolio. They announced measures to continue their focus on cost-cutting, with a proposed restructuring of the insurance arms that will lead to lower costs. In addition, they announced the cutting of 121 staff members that will lower operating costs, going forward. Investors can expect more adjustments in the group that will flow from the acquisition of the majority shareholding of the Guardian group.
The top three Junior Market stocks this week, with the potential to gain between 260 to 695 percent by March 2021, are Caribbean Producers, followed by Lasco Financial, while Caribbean Cream and Lumber Depot share the third position. In the Main Market, the top three stocks continue to be Radio Jamaica continues to lead, followed by Berger Paints and JMMB Group with expected gains of 186 to 208 percent.
The targeted average PE ratio of the market is 20 based on profits of companies reporting full year’s results for the financial year ending after the second quarter of 2020, up to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level. The JSE Main Market ended the week, with an overall PE of 15.2 and the Junior Market at just 10.7, based on IC Insider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks averages a mere 5.7 at just 53 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at 8.6 or 57 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 284 percent, for the Junior Market and 141 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. The expected gain for each stock is based on earnings and PE ratios for the current fiscal year. The ranking of stocks is done in order of likely increases. The highest-ranked stock is the most attractive. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. 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.

Filed Under: Buy Rated Tagged With: , , , , , , , , , , , , , , , , , , , , ,

Steady going for IC Top 10 stocks

June 27, 2020 by

The Main Market put in a positive performance this past week, with the market index rising over 5,000 points, at the same time, the Junior Market bob and weaved its way to a minor loss for the week, resulting in changes to the TOP 10 lists.
The market move resulted in just two changes to the IC Insider.com TOP 10 weekly lists as the Main Market recovered almost all of the losses in the previous two weeks of 3,784 points a week ago and just under 2,000 points in the week before.
For the Junior Market TOP 10, Medical Disposables returns to the ten, after just a week’s absence, replacing General Accident that rose in the week.
This week’s focus:  General Accident enjoyed increased buying interest this past week, following the announcement from the company that they acquired an additional ten percent of the issued shares of MotorOne insurance company in Trinidad, taking their holdings to 65 percent. Also, the brokerage house, Mayberry Investments, upgraded the company’s earnings to 70 cents per share for this year, from 60 cents, previously and have a buy recommendation on the stock. IC Insider.com’s forecast is 85 cents per share for the current year. The stock closed on Friday at $6, up from $5.51 last week and traded over $8, last year, October. It now sits just below the Top 10 stocks, with the potential to reach $15 within the next nine months.
The top three Junior Market stocks, this week, with the potential to gain between 305 to 712 percent by March 2021 are Caribbean Producers, followed by Lasco Financial and Caribbean Cream, with the price dropping from $2.85 to $2.47. In the Main Market, the top three stocks continue to be Radio Jamaica continues to lead, followed by Berger Paints and JMMB Group with expected gains of 173 to 205 percent.
The targeted average PE ratio of the market is 20 based on profits of companies reporting full year’s results for the financial year ending after the second quarter of 2020, up to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level. The JSE Main Market ended the week, with an overall PE of 15.2 and the Junior Market at just 10.6, based on 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks averages a mere 5.6 at 53 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at 8.8 or 58 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 291 percent, for the Junior Market and 136 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 some of the best returns up to March 2021. Gains for each company are based on the earnings and PE ratios for the current fiscal year.
The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. The classification of the securities is in order of likely increases, with the most attractive highest ranked first. 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.

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Junior & Main Market performance gap grows

June 20, 2020 by

IC Insider.com TOP 10 weekly reports indicated for some time that the best buys for Jamaican stocks are in the Junior Market. Since the drop in March, the Junior Market is recovering at a faster pace than the Main Market and the trend continues.
Following on from last week when the Junior Main Market rose four out of five trading days, the market rose three days this past week with Thursdays decline being a mere seven points and the market rising 12 points for the week.
The Main Market lost just under 2,000 points last week and lost 3,784 points this week, thus widening the performance gap between this market and the Junior Market, for the year to date.
For the Junior Market TOP 10, Elite Diagnostic price dropped from $4.17 last week to $3.81 and moved back into TOP 10, replacing Medical Disposables that inched up to $6.95 from $6.69 last week. There was no change to the TOP 10 Main Market, this past week.
The past week closed with the three top Junior Market stocks with the potential to gain between 254 to 698 percent by March 2021 are Caribbean Producers, followed by Lasco Financial and Caribbean Cream that took over from Lumber Depot that was number three last week. In the Main Market, the top three continues to be Radio Jamaica continues to lead, followed by Berger Paints and JMMB Group with expected gains of 170 to 230 percent.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results for the financial year ending after the second quarter of 2020 up to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level. The JSE Main Market ended the week, with an overall PE of 14.3 and the Junior Market at just 9.6, based on 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks averages a mere 5.7 at just 59 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at 8.6 or 60 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 283 percent, for the Junior Market and 140 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 some of the best returns up to March 2021. The expected gain for each stock is based on earnings and PE ratios for the current fiscal year. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. 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.

Filed Under: Buy Rated Tagged With: , , , , , , , , , , , , , , , , , , , , , ,

Virus hits SOS in 2020 Q1

June 16, 2020 by

The 2019 financial year was an excellent one for Stationery and Office Supplies, with record revenues of just over $1.2 billion, resulting in net profit rising 47 percent to $135 million over the previous year.
On the heels of the robust 2019 performance, SOS started the 2020 fiscal year on a much more somber note as the Coronavirus intervened and changed what started as a promising quarter and ended with lost sales in the final month. The Deputy Managing Director, Allan McDaniels and Marjorie McDaniels,  Chief Operating Officer in their joint report accompanying the interim results, reported that the ”revenues dropped 17 percent year over year for March, after a strong showing for the first two months of the quarter.” The directors also stated that the company “was only able to deliver on one of three planned shipments of goods for the first four months of the year to Grenada.” as a result of the disruption caused by the Coronavirus.”
SOS closed out its first quarter with sales of $337 million, a 2 percent decline versus the $343.5 million in comparative period for 2019, net profit dropped a more aggressive 24 percent, from $57.4 million in 2019 to $43.8 million in 2020.
Direct expenses were down 2 percent to $172 million, but the Gross profit margin for the quarter was constant at 49 percent in the 2020 quarter, similar to the 2019 first quarter. Gross profit closed out the quarter at $165 million down slightly from $168 million in the March 2019 quarter.
Net profit margin before finance cost declined for the March quarter to 14 percent with $45.54 million generated compared to $60 million for a 17 percent margin, in 2019.
Administrative expenses grew by 11 percent to $86 million, but selling and promotional expenses were effectively flat at $23 million. SOS realized $3.3 million profit from the disposal of property and equipment, helping to offset some of the reduced operating profit for the period.
Earnings per share came out at 18 cents for the quarter, down from 23 cents for the 2019 first quarter. IC Insider.com is forecasting $1 per share for PE of six times earnings, but that depends on how quickly the company can recover from the dislocation to sales.
The operations generated $50 million in cash inflows and the company paid out a net amount of $22 million in increased working capital, capital expenditure and loan repayment.
Cash and equivalents rose 66 percent between March 2019 and 2020 to end at $90.4 million. Current assets increased by 8 percent to $521 million with trade and other receivables accounting for $173 million, down from $182 million from a year ago. Inventories ended at $226 million from $223 million at the end of March 2019. Current liabilities stood at $120 million down 23 percent year over year from $156 million.  Current liabilities include borrowings of $30 million and payables of $91 million. Overall total loans payable amounted to $91 million. Shareholder’s equity climbed to $640 million up from $540 million at the end of March 2019 and $597 million at the end of December last year.
The stock traded at $6 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 6 times 2020 earnings.

Filed Under: Company News, Company Results Tagged With: , , , , , , ,

3 changes to BUY RATED Top 10

June 14, 2020 by

The Junior Main Market rose four out of five trading days this past week, with the market gaining 2.5 percent while the Main Market lost just under 2,000 points for a loss of half of one percent.

Scotia Group this week’s featured stock

In the last week of May, the Junior Market index gained 3 percent in continuation of a 4 percent rise in the prior week while the Main Market rose 2 percent, with less than a percentage point rise for the previous week.
IC Insider.com TOP 10 weekly reports indicated for some time that the best buys in the Jamaican markets are in the Junior Market, investors by their actions since the market dived in March are confirming this by pushing the Junior Market at a faster pace than the Main Market.
For the Junior Market TOP 10, CAC 2000 and KLE Group dropped out, with full-year earnings, downgraded, with the loss incurred for the six months for CAC and KLE struggling from lack of business due to coronavirus, with little possibility of either of them making up grounds to put them back in TOP 10 contention, for 2020. Elite Diagnostic price climbed from $3.74 to $4.17 and moved out of the group. Replacing the stocks dropping out of the TOP 10 are Caribbean Assurance Brokers, Jamaican Teas and Medical Disposables. There was no change to the TOP 10 Main Market this past week.
This week’s focus: Scotia Group released half-year results to April this past week, but investors are concerned about the impact of bad loans on the profits of banks and they may be overreacting to it. Scotia Group reported a net income of $4.02 billion for the six months to April compared to $5.62 billion for the corresponding period last year. Excluding additional loan provisions of $1.11 billion due to the revision of expected credit losses, net income would be down $488 million or 8.7 percent. When the added loan provision and reduced fee income are taken into consideration, the second quarter, the results would have beaten the pretax profit in 2019, by a small margin.
The group loan portfolio increased $34 billion or 18 percent year over year, primarily due to 28 percent growth in commercial loans, with delinquency of only 0.8 percent. The retail loan portfolio increased 11 percent over the prior year and included a 14 percent increase in mortgages. The growth in loans is the most critical factor in determining likely gains in profit going forward.
The past week closed with the three top Junior Market stocks with the potential to gain between 260 to 692 percent by March 2021 are Caribbean Producers, followed by Lasco Financial and Lumber Depot. In the Main Market, Radio Jamaica continues to lead, followed by Berger Paints and JMMB Group, with expected gains of 165 to 233 percent.
The targeted average PE ratio of the market is 20 based on the profits of companies reporting full year’s results for the financial year ending after the second quarter of 2020 up to the second quarter in 2021. Both the Junior and Main markets are currently trading well below this level. The JSE Main Market ended the week, with an overall PE of 14 and the Junior Market at just 9.3, based on current 2020-21 earnings. The PE ratio for Junior Market Top 10 stocks averages a mere 5.7 at just 61 percent to the average of the overall Junior Market. The Main Market TOP 10 stocks trade at 8.6 or 62 percent of the PE of the overall market.
The average projected gain for the IC TOP 10 stocks is 283 percent, for the Junior Market and 140 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 some of the best returns up to March 2021. Expected gains are computed based on earnings and PE ratios for the current fiscal year. The ranking of stocks is in order of likely increases, with the highest-ranked, being the most attractive. 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.

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