Helped by a big jump in foreign exchange gains of $11.7 million versus a loss of $1.76 million in 2020 profit at Salada Foods surged 220 percent in the December 2021 quarter to $42 million from $13 million in 2020 from sales revenues that rose 28 percent to $289 million from $226 million in 2020.
The big improvement in results owes a lot to the dislocation the company suffered in the 2020 period resulting in a 22 percent fall in revenues and the small profit shown above. Salada does not sell to the end users so disruption in sales in one period may only be a shift from one period to the next. So it was not surprising the sales jump 29 in the second quarter last year to $353 million, with a profit of $51 million
The company suffered a reduced profit margin to 31.88 percent from 32.98 percent in the September 2021 quarter, but it is up substantially on the 25.5 percent in the December 2020 quarter. The September quarter had revenues of $300 million and profit of $41 million as such the improvement in profit margin wade the difference in the December quarter’s performance that had lower sales.
Administrative expenses rose 11 percent to $33.4 million from $30 million. Marketing and sales expenses increased 10 percent to $16 million. Finance income rose to $13 million from $1.25 million in 2020. Taxation on profits jumped from $4.6 million to $14 million.
Gross cash flow brought in $62 million and ended at $116 million after changes in working capital and after paying $57 million in dividends the company ended with $176 million in cash funds. At the end of the quarter, shareholders’ equity stands at $989 million with no borrowed funds used to fund the operations. Current assets ended at $1 billion, including inventories of $578 million. Net current assets ended the period $759 million well over Payables of $254 million.
Earnings per share came out at 4 cents for the quarter. The stock traded that was already highly overvalued at $6.90 was pushed up to an incredible $8.50 on Tuesday after the results were released on Monday on the Main Market of the Jamaica Stock Exchange with an elevated PE ratio of 42.5 times ICInsider.com forecast of 20 cents per share for the 2022 fiscal year’s earnings, well above the market average of 16.5.
Profit jumps 220% at Salada but be wary
Trading slips in Trinidad
Market activity on the Trinidad and Tobago Stock Exchange, ended on Tuesday, with an equal number of stocks rising and falling, after 48 percent fewer shares were traded, with 50 percent lower value than on Monday.
Nineteen securities traded compared to 20 on Monday, with five rising, five declining and nine remaining unchanged.
The Composite Index fell 2.03 points to 1,519.17, the All T&T Index shed 1.04 points to close at 2,128.82 and the Cross-Listed Index declined 0.43 points to settle at 121.49.
A total of, 313,686 shares traded for $4,784,210 compared to 598,828 units at $9,609,505 on Monday. An average of 16,510 units traded at $251,801 compared to 29,941 shares at $480,475 on the previous day, with trading month to date averaging 64,457 units at $538,719 versus 74,359 units at $597,974. The average trade January amounts to 39,943 units at $369,498.
Investor’s Choice bid-offer indicator shows two stocks ended with bids higher than their last selling prices and three with lower offers.
At the close, Agostini’s had an exchange of 325 shares at $46, Angostura Holdings advanced 50 cents to $20 after 200 units crossed the market, Ansa McAl increased 24 cents in closing at $58.99 in an exchange of 87 stocks. First Citizens Group rose 49 cents to end at $64.49 after 175 stock units changed hands, FirstCaribbean International Bank fell 3 cents to close at $6.10, with 5,380 units clearing the market, GraceKennedy shed 38 cents to close at $5.82 trading 2,000 stocks. Guardian Holdings popped 1 cent to $29.76 after finishing trading of 6,562 stock units, JMMB Group remained at $2.50, with 13,373 shares changing hands, Massy Holdings slipped 1 cent to end at $105.99, with 9,888 shares crossing the exchange. National Flour Mills ended at $1.87 after exchanging 15,532 units, NCB Financial Group finished trading 218,979 stock units at $8, One Caribbean Media remained at $4.15 with an exchange of 2,035 stocks. Prestige Holdings dropped 4 cents to $7 after 2,440 stocks passed through the market, Republic Financial Holdings ended unchanged at $142.86 in trading 3,510 units, Scotiabank ended in switching ownership of 6,624 stock units at $72.01. Trinidad & Tobago NGL lost 72 cents to close at $19.25 with the swapping of 1,801 shares, Trinidad Cement gained 10 cents after ending at $3.90 in exchanging 450 stock units, Unilever Caribbean remained at $16 with the swapping of 2,680 shares and West Indian Tobacco finished trading of 21,645 units at $26.06.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
Gains for JSE USD market
Trading bounced on Monday at the close of the Jamaica Stock Exchange US dollar market, with the volume of shares changing hands surging 794 percent, with a 243 percent higher value than on Friday, resulting in an even number of stocks rising than falling.
Trading ended with eight securities changing hands, compared to six on Friday with prices of three rising, three declining and two ending unchanged.
The JSE US Denominated Equities Index rallied 2.75 points to end at 207.54. The PE Ratio, a measure used in computing appropriate stock values, averages 13.5. The PE ratio uses ICInsider.com earnings forecasts for companies with the financial year up to August 2022.
Overall, 740,458 shares traded for US$41,979 compared to 82,839 units at US$12,251 on Friday.
Trading averaged 92,557 units at US$5,247, compared to 13,807 shares at US$2,042 on Friday and month to date an average of 59,354 shares at US$3,232 versus 49,137 units at US$2,612 on Friday. January ended with an average of 91,572 units for US$7,142.
Investor’s Choice bid-offer indicator shows no stock ended with a bid higher than their last selling prices and no stock with a lower offer.
At the close, First Rock Capital USD share ended unchanged at 7 US cents after trading 330,661 shares, Margaritaville remained at 18 US cents after exchanging one unit, Proven Investments advanced 0.8 of a cent to 22 US cents and exchanging 20,281 stocks. Sterling Investments climbed 0.2 of a cent to 2.3 US cents with the swapping of 62,791 stock units, Sygnus Real Estate Finance USD share shed 1 cent to end at 13 US cents in exchanging 21,724 stocks, Transjamaican Highway rallied 0.01 of a cent in closing at 0.89 US cents in an exchange of 300,000 units.
In the preference segment, JMMB Group 5.75% declined 7 cents to US$2.02 and closed, with 3,000 shares changing hands and JMMB Group 6% dropped 12 cents to close at US$1.02, with 2,000 stock units crossing the market.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
Trinidad stocks inched higher on Monday
Market activity ended on Monday and resulted in an equal number of stocks rising than falling at the close of trading, after trading 10 percent more shares, with a 34 percent higher value than on Friday, as the market indices inched up higher at the close of the Trinidad and Tobago Stock Exchange.
Twenty securities traded against 18 on Friday, with rising and declining stocks ending with five each and 10 ended unchanged.
The Composite Index rallied 3.05 points to 1,521.20, the All T&T Index rose 5.80 points to 2,129.86 and the Cross-Listed Index popped 0.01 points to settle at 121.92. Overall 598,828 shares traded for $9,609,505 compared to 543,618 units at $7,179,353 on Friday.
An average of 29,941 units traded at $480,475 compared to 30,201 shares at $398,853 on Friday, with trading month to date averaging 74,359 units at $597,974 versus 86,697 units at $630,612 previously. The average trade for January amounts to 39,943 units at $369,498.
Investor’s Choice bid-offer indicator shows three stocks ended with bids higher than their last selling prices and none with a lower offer.
At the close, Agostini’s ended trading 77 shares at $46, Angostura Holdings declined 50 cents to $19.50 with 4,425 units crossing the market, Ansa McAl lost 25 cents to end at $58.75 after 85 stock units switched hands. inemaOne finished at $4 after exchanging 851 stocks, Clico Investment Fund advanced 50 cents in closing at $30 after trading 6,607 stock units, First Citizens Group rallied 25 cents to $64, with 343 stocks changing hands. GraceKennedy ended unchanged at $6.20, with 72,065 shares clearing the market, Guardian Holdings fell 25 cents to close at $29.75 while exchanging 7,635 units, JMMB Group gained 15 cents in closing at $2.50 in trading 424 units. Massy Holdings ended at $106 with the swapping of 26,169 shares, National Enterprises finished at $3.25 after exchanging 1,513 stock units, NCB Financial Group remained at $8 with 341,230 stocks changing hands. One Caribbean Media shed 5 cents to $4.15 with an exchange of 45 stock units, Point Lisas remained at $3.27 in exchanging 65,000 units, Republic Financial Holdings dropped 14 cents in ending at $142.86 after an exchange of 16,765 stocks. Scotiabank finished at $72.01, with 439 shares crossing the exchange, Trinidad & Tobago NGL climbed 47 cents to end at $19.97 in switching ownership of 15,454 shares, Trinidad Cement rose 5 cents in closing at $3.80 with an exchange of 38,019 units. Unilever Caribbean ended unchanged at $16 in exchange of 600 stock units and West Indian Tobacco finished at $26.06 trading 1,082 stocks.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
Profit climbs 24% in Q2 at Wisynco
Revenues at Wisynco Group jumped 19 percent for the quarter to December to $9.5 billion above the $8 billion for the similar quarter of the previous year while for the half year revenues were up 17 percent to $18.7 billion from $16 billion in 2020.
“We have seen a continued recovery in our Revenues with all Channels increasing at vibrant levels. Exports as well for the quarter were up 103 percent over the same quarter of the prior year. Our increased efforts and focus have resulted in improved results in this area and we have noticed wider consumer acceptance for our products in these important export markets.” William Mahfood, Chairman and Andrew Mahfood, Chief Executive Officer stated in their joint report to shareholders. “Exports have moved from 3 percent of overall sales to 5 percent,” the chairman informed ICInsider.com.
Gross Profit climbed 24.3 percent for the quarter to $3.3 billion from $2.7 billion in the same quarter of the previous year while it grew 18.6 percent from $5.6 billion to $6.6 billion. Improvement in gross margin from 33.3 percent for the 2020 December quarter to 34.8 percent helped to swell the gross profit and helped to drive net profit for the quarter as well as a smaller rise in margins from 34.6 percent to 35.2 percent contributed to improved numbers for the half year and bodes well for the second half. Selling, Distribution expenses grew at a slower pace than sales revenues at 17.6 percent to $1.74 billion for the quarter and 11.4 percent for the six months to $3.39 billion from $3 billion in 2020. Administrative expenses for the quarter rose by 6 percent to $357 million from $337 million in 2020 and for the year to date, they rose 6.4 percent from $691 million to $735 million in the prior year.
Profit before Taxation surged 84.6 percent for the quarter to $1.5 billion, over the $836 million in the comparative quarter for the prior year and includes an exchange gain of $280 million compared to an exchange loss of $26 million for the 2020 quarter. Profit before taxation for the half year jumped 51.6 percent to $2.8 billion compared to $1.9 billion in the prior year.
After provision for taxes, Wisynco recorded net profits attributable to stockholders of $1.2 billion, or 31c per share for the quarter, 74 percent greater than the $688 million earned for the prior year and the six months net profit rose from $1.54 billion to $2.13 billion, with 57 cents in earnings per share.
Cash inflows from operations were $2.9 billion, up from $2.45 billion in 2020.
Shareholders’ Equity stood at $17 billion, with borrowings at $1.9 billion. Current Assets ended the quarter at $16 billion up from $13 billion the previous year and Current Liabilities stood at $5.6 billion compared to $4.6 billion at the end of 2020. Cash funds and short term investments ended the period at $9.6 billion up from $6.9 billion in 2020, Mahfood points to this amount and suggests that it is not contributing much to profits. The conclusion is that the company will be on the watch for viable acquisitions to provide a better rate of return.
The board declared an interim dividend of 20c per share, up from the 10 cents per share interim dividend declared in January 2021. The dividend will be paid on March 1, to shareholders on record on February 15. The stock trades ex-dividend February 14, 2022.
“We started to see a better turnaround in the operations from the middle of last year,” William Mahfood advised ICInsider.com. He felt that improved service to customers and increased attention paid to the cost were contributing factors as well. Mahfood indicated that January was a strong month for the group and hopes that it will carry through for the rest of the quarter. Although only around 10 percent of revenues go directly into the hotel sector, there is evidence of a strong rebound in tourism in the sector that is contributing to the resurgence in sales.
ICInsider.com projection is for earnings of $1.30 for the current year ending in June and $1.75 for the next fiscal year. The stock climbed from $17.75 before the release of the results after the market closed on Thursday to $20 at the close on Friday for a PE ratio of 15 and 11 times next year’s earnings.
More changes for ICTOP10 listings
The Junior Market closed at record highs on each of the last seven days, fueled by an upsurge in trading, with several days ending with all listed securities trading driving the volume and value traded upwards to levels not seen in months and resulting in several stocks reaching new 52 weeks’ highs.
The Main Market showed some bullishness this past week with the JSE All Jamaican Composite Index climbing 6,525.97 points to the highest level since late October last year. More than two thirds of the gains came on Friday helped by gains by heavyweights, Sagicor Group putting on $1, Scotia Group popping $1.60 and Wisynco jumping $2.25 after reporting strong increased profit for the December quarter.
The Junior Market Index is up a remarkable 16.3 percent for the year to Friday that is more than half of all of the 2021 gains, with the average rise in prices even greater at 19 percent. That quick upward movement is equivalent to an annualized gain of 194 percent and may result in investors questioning its sustainability.
Spur Tree Spices seems to have reached a peak for now but the previously last listed Junior Market stock, Future Energy, gained new life and sprinted to an all-time high of $4.50, no doubt driven by investors’ views that the increased price of gasoline will drive up sales and margins. While sales will rise in dollar terms margin may not. The party was not only for the gasoline supplier, Fontana in the TOP10 for the week ending the 21st of January at $7.40 hit new record highs this week up to $12.49 for an increase of 69 percent in a matter of weeks.
Two high performing stocks pulled back this week Dolphin Cove hit a record high of $30 during the week but pulled back to $22 on Friday while former ICTOP10 listed Caribbean Producers hit a record high of $25.99 earlier in the week, pulled back to $16 on Thursday before closing the week at $17.85. December results should be out for this stock during the coming week and will have benefitted from the resurgence in tourist arrivals.
Medical Disposables gained 12 percent this past week to end at $7.55 and exited the Junior Market TOP10 listing, with Elite Diagnostic having traded at a 52 weeks’ high of $4.40 two weeks ago and ended the previous week at $3.73, suffered more losses this past week and is back to the TOP10. In the Main Market, Scotia Group rose nine percent to $37.50 and was replaced in the TOP10 by Jamaica Broilers.
Lasco Distributors jumped 15 percent to $3.73 ahead of third quarter results due out shortly and General Accident moved up 7 percent to $6.50, while Honey Bun and Jetcon Corporation both rose 5 percent in the week. AMG Packaging rose 3 percent to end at $3.70 and so did Caribbean Assurance Brokers that closed at $3.10.
Guardian Holdings climbed 5 percent to close at $575, JMMB Group held on to a 2 percent rise for the week and traded at a 52 weeks’ high of $44.61 on Friday but closed at $41.99. Pan Jam Investment and Radio Jamaica settled with a 5 percent rise for the week, while Proven Investment lost 8 percent to close at US$0.21 and Sygnus Credit Investments slipped 4 percent to $15.23.
The sharp price movements in the Junior Market over the recent past weeks reduced the potential gains markedly, with the average increase projected for the TOP 10 Junior Market stocks now at 104 percent versus 114 percent last week and is now lower than the Main Market at 128 percent.
The top three stocks are Caribbean Assurance Brokers followed by Lasco Financial and Lasco Distributors to gain between 114 and 126 percent, compared to 128 and 148 percent, previously.
The potential gains for Main Market stocks moved from 131 percent to this weeks’ 128 percent, with the top three being JMMB Group followed by Guardian Holdings and Sygnus Credit Investments all projected to gain between 165 and 186 percent from 155 and 193 percent last week.
After trading at a big discount to the Main Market for two years, the average PE for both the JSE primary markets has virtually merged just below 17 times 2021 earnings.
The Junior Market closed the week, with an average PE of 16.8 based on ICInsider.com’s 2021-22 earnings and is currently below the target of 20 and now virtually at the average of 17 that was achieved at the end of March last year. The TOP 10 stocks trade at a PE of a mere 9.8, with a 42 percent discount to that market’s average. That means there is a lot of room for the TOP10 stocks to run between now and the end of March.
The Junior Market can gain 19 percent to March this year, based on an average PE of 20 that would take the index to 4,700 points. About a third of Junior Market stocks with positive earnings are trading at or above this level, averaging around 23.
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 this year. The Main Market TOP 10 average PE is 8.9 representing a 46 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 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.
JSE USD stocks moved higher on Friday
Trading on Friday, ended with the volume of shares trading falling 65 percent, with a 29 percent lower value than on Thursday, at the close of the Jamaica Stock Exchange US dollar market, resulting in more stocks rising than falling.
Trading ended with six securities changing hands, compared to seven on Thursday with prices of four rising, two declining. The JSE US Denominated Equities Index gained 6.68 points to end at 204.79.
The PE Ratio, a measure used to compute appropriate stock values, averages 13.3. The PE ratio calculation uses ICInsider.com earnings forecasts for companies with the financial year up to August 2022.
A total of 82,839 shares traded for US$12,251, down from 239,208 units at US$17,234 on Thursday. Trading averaged 13,807 units at US$2,042, compared to 34,173 shares at US$2,462 on the previous day and the month to date averages 49,137 shares at US$2,612 compared to 59,737 units at US$2,783 on Thursday. January ended with an average of 91,572 units for US$7,142.
Investor’s Choice bid-offer indicator shows no stock ended with the bid higher than their last selling prices and one with a lower offer.
At the close, First Rock Capital USD share rallied half of a cent after ending at 7 US cents in an exchange of 27,000 shares, Margaritaville added 3 cents to close at 18 US cents in trading 118 stock units, Productive Business Solutions rose 16 cents to US$1.16 trading 1,703 stocks. Proven Investments fell 0.8 of a cent in closing at 21.2 US cents after an exchange of 33,587 units, Sygnus Credit Investments USD share dipped 0.1 of a cent to 12.85 US cents, with 9,000 units crossing the market and Transjamaican Highway gained 0.05 of a cent to 0.88 of one US cent with an exchange of 11,431 stocks.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.