Stationery and Office Supplies returns to the Junior Market IC TOP 10 list for the first time since February last year as the stock price dropped to $4.55 and replaced Medical Disposables that reported a loss in the half-year, resulted in the downgrading of full year’s earnings and potential stock price movement.

Stationery & Office Supplies Head quarters

Medical Disposables earnings per share are now projected at 30 cents for the current year and 85 cents for the succeeding year and put the PE ratio at 14 times current-year earnings. As indicated last week, Lasco Financial was set to be a big winner for the past week, after the company reported outstanding second-quarter profit. The stock rose 23 percent to close the week at $2.60 after trading as high as $2.75 in the week. The price should move higher going forward, with likely earnings around 40 cents per share for the current fiscal year and a PE ratio of 6.5.
Signals in the market continue to point to higher prices ahead. The Junior Market is currently signaling a big surge in a few weeks as short-term moving averages cross over longer-term ones to confirm a strong rally ahead. The big move in the Main market seems a few months away, but signs are that the market should continue to move gradually higher ahead of the year-end.
This week’s focus: Grace Kennedy continues to enjoy a phenomenal year, with profit attributed to the company’s shareholders, rising 33 percent to $1.68 billion in the September quarter, from $1.26 billion for the third quarter in the previous year and grew 35 percent for the nine months to September, to just $4.4 billion from $3.27 billion the corresponding period in 2019. Taxation more than doubled in both periods, but profit before tax grew 49 percent in the third quarter to $2.79 billion and for the nine-months, it rose 51.5 percent to $7.3 billion. Earnings per share are $1.69 for the quarter and $4.47 for the nine months and should exceed $6 for the full year.
The top three stocks in Junior Market remain as they were this past week, with the potential to gain between 272 to 726 percent by March 2021. Caribbean Producers heads the list, followed by Caribbean Assurance Brokers and elite Diagnostic. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 150 to 238 percent, the top three Main Market stocks are now, Berger Paints followed by JMMB Group and Grace Kennedy in the third position.
The local stock market’s targeted average PE ratio is 20 based on the profits of companies reporting full year’s results from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.8 and the Junior Market 12.1, based on ICInsider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6.5 at just 54 percent to the average of the Junior Market. The Main Market TOP 10 stocks trade at a PE of 8.3 or 52 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 247 percent, and 147 percent for the JSE Main Market, based on 2020-21 earnings, indicating potentially greater gains in the Junior Market than 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 result in movements 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.

Kremi and NCB Financial are back in the Main and Junior Markets IC TOP 10 lists for the week as Access Financial and Salada Foods moved out, with the former earnings downgraded following the release of half-year results while the latter recovered from the price decline suffered in the previous the week.  

Jacinth Hall-Tracey, Managing Director of Lasco Financial.

The past week belonged to Caribbean Cement (CC) that posted strong increased revenues and profit with the stock jumping 12.5 percent from $45.96 to close at $57. As was the case with CC last week, Lasco Financial is set to be a big winner this week, with the company reporting outstanding second-quarter profit that should encourage investors to pick up the stock.
The Main and Junior markets closed trading for October lower than September. Signals in the market point to higher prices ahead. The Junior Market is currently signaling a big surge that will start in a few weeks as short-term moving averages cross over longer-term ones to confirm a strong rally ahead. The big move in the Main market seems a few months away, but signs are that the market should continue to move gradually higher ahead of the year-end.
This week’s focus: Lasco Financial generated $136 million in the September quarter profit compared with a loss of $16 million for the second quarter in the previous year. Profit after tax for the six months to September amounts to just $30 million, down from the corresponding period’s $75 million, and an improvement on the first-quarter loss of $106 million. Earnings per share ended at 10.7 cents for the quarter and 2.4 cents for the half-year. For the quarter, revenues fell 5.7 percent or $38 million from the 2019 September quarter to $617 million, due largely to the decline of revenues from loans that fell 34.5 percent or $152 million in the six months to September, compared with the previous year financial period.
Remittances grew 11 percent and added $50 million to revenues while Cambio operations contributed 10.8 percent or $34 million to increased revenues, the company’s Managing Director Jacinth Hall-Tracey, informed shareholders in a commentary accompanying the quarterly report.
Access Financial reported $62 million in profit after tax for the six-month to September, compared to $280 million for the same period in 2019. Higher revenue in the September quarter was offset by a $45 million increased loan loss provision, resulting in a slightly lower profit of $29 million versus $33 million in the first quarter. The next few quarters will be interesting to watch for future direction.
The top three stocks in Junior Market remain as they were this past week, with the potential to gain between 287 to 723 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. With Lasco Financial posting strong second-quarter results, they will likely drop out of the top three this coming week. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 161 to 238 percent, the top three Main Market stocks are now Berger Paints followed by JMMB Group, Radio Jamaica replacing Grace Kennedy in the third position last week.
The market’s targeted average PE ratio is 20, based on companies’ profits reporting full year’s results from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.8 and the Junior Market 12.2, based on ICInsider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 6 at just 49 percent to the Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.3 or 52 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 287 percent, and 149 percent for the JSE Main Market, based on 2020-21 earnings, indicates potentially greater gains in the Junior Market than 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 result in movement 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.