TTSE: Witco drops back by $3

Tuesday, 2nd July 2013 | The West Indian Tobacco Company stock that reached a new all-time high yesterday after making several other highs in recent past months, lost the $3 it gained in yesterday’s trading with only 210 units sold.

Market activity resulted in 13 securities trading of which 2 advanced, 2 declined and 9 traded firm with trading in the main market accounting for 210,003 units valued at only $286,299. JMMB dominated the trading volume with 121,356 shares for a value of $60,678. The share price of JMMB is relatively small compared to most of the listed companies shares, hence the value traded was far less than Monday’s $1,004,310 while Clico Investment Fund, traded just213 shares valued at $4,899 in the mutual fund segment. Trinidad Cement had a volume of 76,059 shares changing hands for a value of $72,256. Sagicor Financial Corporation 5,825 shares with a value of $36,686, National Enterprises had 11,500 shares traded for a value of $182,980. Angostura Holdings chipped in with 4,070 shares with a value of $36,630.

IC indicator | At the end of trading, the Investor’s Choice bid-offer sentiment indicator shows that bids for 4 stocks were higher with 3 stocks that had offers lower than their last selling price.

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Stocks to watch: week of 1st July, 2013

Keep an eye on these stocks for movement | There aren’t many changes to this week’s posting compared to last weeks’. We added two new ones in the junior market as the Lasco companies gain interest from the approved stock split of 10 for 1 and one for the TTSE.

StocksToWatchJul1

TTSE: Witco all the rage, up $3

Monday, 1st July 2013 | The West Indian Tobacco Company marked a new all-time high, increasing by $3 to end the day at $120 as it traded 1,861 units between $117 and $120 the last traded price. Scotiabank declined by $0.21 to close at $69.75 while trading 3,600 shares valued at $251,100.

Overall market activity resulted in 10 securities trading of which 2 advanced, 4 declined and 4 traded firm.

Trading in the main Market took place in 193,120 units valued at $1,004,310 and Clico Investment Fund traded 165,350 shares valued at $3,802,530 in the mutual fund segment. Trinidad Cement had a volume of 169,589 shares changing hands for a value of $161,110, followed by National Enterprises with a volume of 11,500 shares being traded for $182,980. Guardian Holdings contributed 4,750 shares to the level of trading with a value of $76,000.

IC indicator | At the end of trading, the Investor’s Choice bid-offer sentiment indicator shows that bids for 2 stocks were higher with 3 stocks that had offers lower than their last selling price.

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TTSE: PE ratio chart

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In a market with stocks that trade at high PE ratios, this PE Chart shows the potential for price growth and bargains that can be had on the Trinidad Stock Exchange (as of 28 June 2013).

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PE ratios for TTSE listed companies at mid-year,  30th June 2013

TTSE: Witco’s new high, only 5 stocks traded

Friday, 28th June 2013 | The West Indian Tobacco Company recording a new record trading at 52 weeks high when it closed up by $1 at $117, as 3 stocks enjoyed positive changes in price with only 5 stocks trading with a volume of 217,976 shares valued at $8,117,281.

Neal & Massy Holdings had 94,995 shares changing hands for a value of $5,604,705. Republic Bank traded 10,663 shares at a value of $1,173,112. Angostura Holdings traded 92,274 shares for a value of $830,466. National Flour Mills contributed 15,800 shares to the total amount that traded, with a value of $12,450.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 2 stocks were higher with 4 stocks that had offers lower than their last selling price.

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TTSE: Only 5 stocks trade

Thursday, 27th June 2013 | Only one stock recorded a price change from the last traded price in today’s trading on the Trinidad Stock Exchange the stock price fell moderately. Trading took place in 10 stocks on Thursday as the main market saw a volume of 419,688 shares trading valued at $1,837,719. Buying was much more tempered in the mutual fund market as Clico Investments, the sole trader, amassed a mere 242 shares at a value of $5,566.

Angostura Holdings recorded 148,598 shares changing hands for a value of $1,337,382, Sagicor Financial Corporation had 23,467 shares trading valued at $147,138, Trinidad Cement contributed 161,487 shares at a value of $153,413. National Flour Mills contributed 76,673 shares to the total amount that traded with a value of $57,515.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 2 stocks were higher with 4 stocks that had offers lower than their last selling price.

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TTSE: Clico dominates

Wednesday, 26th 2013 | Ten stocks traded on the exchange on Wednesday with only one stock recording a price movement as Clico Investment Fund dominated trading with 1,341,576 shares valued at $30,856,248. One stock fell in price on the day as the conglomerate ANSA McAL declined by 2 cents to end the day at $67.20 while trading a mere 486 shares. The main market registered a volume of 189,797 shares valued at $378,214.

Jamaica Money Market Brokers had 107,880 shares changing hands for a value of $53,940. Trinidad Cement saw a volume of 61,153 shares trading for $58,006. Angostura Holdings contributed 10,000 shares with a value of $90,000 and Sagicor Financial Corporation accounted for 8,510 shares valued at $53,358.

IC bid-offer Indicator | At the end of trading, the IC bid-offer sentiment indicator shows that bids for 3 stocks were higher, with 3 stocks that had an offer that was lower than their last selling price.

At the close it appears that Witco with a PE of 26 and Unilever with a PE of 21 are poised for more gains ahead. So too is Scotia Investments, which had a bid of 117,000 shares at $1.78 on Tuesday saw the bid moving to $1.80 for 1,200 shares, the offer is for 21,878 share at $1.85. Others are showing signs of possible price gains are National Enterprises with a PE of 16, One Caribbean Media with a PE of 12.5, National Flour mills with a PE of 6.

TTSEJun26

Unilever stock not supported by profits

When stock prices rise much faster than the growth in profits, we need to take time to take note of what is happening. Investors in such stocks should be fully conversant with the factors at play to ensure that their investment can be properly protected if, and when, the factors change.

Unilever Caribbean stock price is up 13 percent so far this year on top of a 45 percent increase in 2012, 44 percent in 2011 and 35 percent in 2010 after a 16 percent fall in 2009. The company a subsidiary of Unilever PLC, a United Kingdom company, is based in Trinidad and manufactures a range of homecare, personal care and food products for the Caribbean region, including Jamaica, and has been having a reasonable profit performance for a number of years. In fact they have been able to improve sales and margins in a market that has been in recession since 2009. The growth in the stock price is well in excess of the rise in profits for the past four and half years.

Some of the company’s brands include Mistolin, Radiante, Breeze, Vaseline, Lux, Lipton, Becel and Blue Band. The product range also includes dishwashing liquids as well as fabric conditioners.

unileverLogo150x150For the three months to March this year, revenues climbed to $133 .6 million up from $127.5 million for the same period in 2012 while profits were up to $13 million after tax compared to $11.9 million in 2012. The December quarter is the biggest period for earnings with more than a third being generated in the period. For 2012 full year to December the company reported after tax profit of $59.5 million an increase of 2.8 percent over that earned in 2011. Profit for 2011 was up 11 percent over 2010 and 2010 profit was up 26 percent over the previous year. Lower interest rates in Trinidad have helped to push the PE ratio to 21 times earnings at a current stock price of $53.25, up from 14 times in 2011 and 11.5 for 2010.

Unilever reported areas of success reflected in good growth in some of its products but also expressed concerns about rising input cost of some of the products it manufactures as well as competition from cheaper products. From all indications, management seems to have managed to steer the operations well resulting in improved margins, which moved from 61.8 percent in 2012 first quarter to 63.8 percent in 2013, a continuation of the marked improvement seen for 2012 when the margins for the full year came out at 63.7 percent vs the 59.2 percent enjoyed in 2011.

While cost increase seems to be under control in 2013 for the first quarter, that was not the case in 2012 when selling cost rose by $17 million or 17 percent and administrative cost rose 22 percent, well above the growth in revenues. For the quarter, selling cost rose by 4.8 percent and administrative cost rose 2.7 percent while revenues are up 4.75 percent.

The company boast equity capital of $176 million, has no interest bearing debt and a high current asset ratio with liabilities almost covered twice over.

The stock seems poised to rise further as demand exceeds the supply of the stock on the Trinidad market.

TTSE: WITCO at it again, now $116

Tuesday, 25th June 2013 | The West Indian Tobacco Company saw trading in 25,385 shares with a value of $2,940,376 as the stock raced to $116, an all-time high and gained $2 on a day when 167,869 shares traded in the main market valued at $7,325,249 and 5,504 mutual fund shares valued at $126,592 traded.

Trading took place in 11 securities of which 3 advanced, 1 declined and 7 traded firm. Another stock that reached a 52 weeks high was Unilver Caribbean which traded 705 shares and gained 93 cents on the day to close at $53.25.

The major trading of stocks took place for Neal & Massy Holdings, 57,303 shares for a value of $3,380,877, Angostura Holdings, 55,000 shares valued at $495,000 and Guardian Holdings, 13,848 shares valued at $221,568.

IC bid-offer Indicator | At the end of trading, the IC bid-offer sentiment indicator shows that bids for 2 stocks were higher, with 4 stocks that had offers lower than their last selling price.

At the close, it would appear that both Witco and Unilver are poised for more gains ahead. Scotia Investment with a bid of 117,000 shares at $1.78, the last selling price, should move up in price as there is no stock on offer at the close today nor on Monday.

TTSEJun25

Low loan demand squeezes BNS TT

Scotia Bank Trinidad & Tobago hit a new 52 weeks high recently in the price of its stock, so what is happening at the bank to warrant the move in the stock price? Last year the stock was selling at $60.86 in April and on June 24, 2013 it sold at $70.01, a 15 percent rise, yet profits have not been growing all that well. However, the bank raised its dividend from 32 cents per share quarterly last year to 40 cents this year.

Interestingly, the fortune of the Trinidad bank and that of its Jamaican counterpart are tracking similar paths. In Jamaica, profits for Scotia Group have not grown from 2009, almost the same has happened in the Trinidad bank, with no growth since 2011. It looks as if the trend will continue for the Trinidad bank this year as well.

For the six months to April this year, Scotia Trinidad profits just barely budged above the results for the same period in 2012. Net Interest income fell from $462 million in 2012 to $443 million in 2013 but other income rose from $172 million to $224.5 million. The bank was able to keep a lid on expenses which rose from by $24 million to $314 million leaving a profit before tax of $353 6 million some $10 million more than that earned in 2012.

After allowance for taxation of $83 million, net profit rose to $273 million up slightly from $268.7 million in 2012. In the latest April quarter, after tax profits grew by only $1.9 million to reach $128.9 million.

scotiabanklogo150x150The bank seems to have a good grip on loan quality as provisioning bad loans is very low at just $8 million for the six months, an improvement over the $10.5 million in 2012.

Return on Equity | The bank boasts a return on equity of 17.27 percent for the six months period, down from 18.47 percent for the full twelve months for 2012 financial year, which ended in October.

Where is the growth? | For profits to really grow attractively, the bank must grow its loans and assets at a faster pace than it has been doing since 2009. Loans to customers climbed by to $10 billion up from $9.96 billion in October but is flat with April 2012. Deposits did better as these rose to $13.47 billion up from $12.77 billion in April and $12.9 billion in October last year. Loans on the books in October last year contracted compared to the previous year by $700 million or 7 percent. Assets grew by 4 percent in 2012, 5 percent in 2011 and one percent in 2010 down from 11 percent in the previous year. The bank reported of assets of $18.4 billion and equity capital of $3.2 billion.

The bank operates in an economy that is yet to recover from the recession that started in 2008. A lot of the growth a few years prior to 2008 was induced by a major boost in the construction sector, which left newly built units that took awhile to either occupy or sell. This has been a serious drag on the construction sector and by extension, slowed growth in the economy. Without economic growth, bank lending will be slow, which is the main area for growth in income. GDP performance is as follows: 2009, minus 3.3 percent, 2010, 0 percent 2011, minus 1.3 percent, 2012, a positive 1.7 percent. The construction sector fared even worse falling by 7 percent in 2009, 28 percent in 2010 and 8 percent in 2011.

Stock outlook | Against this economic background, it appears that investors cannot expect to see electrifying growth in profits for some time. They also have to be aware that interest rates on savings are at very low levels and any upturn could affect the valuation of stocks on the Trinidad stock market further down the road.