Berger TT profit poised for big gain

The economies of Trinidad & Tobago and that of Jamaica are two contrasting ones. In the case of Trinidad, after a few years of decline the economy is growing again, albeit moderately. Jamaica on the other hand, is still experiencing decline. Interest rates, while sharply down in Jamaica at more than 6 percent, are nowhere near those of the Twin Island state with Treasury rates at less than 1 percent.

But a look at the results for Berger Paints in the two territories would make one wonder if the state of the economies aren’t the same. Both companies are struggling to maintain profitability as the construction sector suffered decline in both countries and are yet to be restored to health. In both countries, there are signs that things may be picking up. For example, Trinidad Cement reported improved sales in the first quarter this year over 2012. In the case of Berger Trinidad, there was a big improvement in the bottom line in the quarter to June with slight pickup in sales to $13.395 million versus $12.891 in 2012. Not much, but enough. This along with a cut in expenses to $13.52 million compared to $14 million, reduced the loss from $1.25 million before tax in 2012 to $185,000 this year and the after tax loss to $179,000 to June this year versus $973,000 in 2012. For the 12 months to March this year, on revenues of $64,146 million and expenses of $62,504 million, the paint company made a profit of $791,000 after tax.

According to figures released for the quarter to June, the company has eliminated some cost. This should made quite a difference to the full year results which IC Insider is forecasting to be 50 cents per share for the year to March 2014.

The price earnings ratio (PE) of the stock is low at just 7 times this year’s earnings, making it a good candidate for investors to profit from.

The financial position of the company is healthy, with working capital being more than two and a half times current assets to current liabilities. Equity capital stands at nearly $25 million with no major debt capital being used in funding its operations. There is virtually no cash on the balance sheet suggesting that they are using cheap bank financing to ensure shareholders max out on profits.

Insider call | Berger TT is an IC Insider Buy Rated stock.

T&T PE chart show bargains

The stock market in Trinidad is not very active partly due to prices of many of the stocks that are too high for that market creating lack of liquidity. The PE chart shows that there are a number of undervalued stocks that investors can made good money from. Top amongst them is Trinidad Cement with a PE of just two even after the price is up nearly 40 percent since July. For the rest of the manufacturing sector, Unilever is at 22, West Indian Tobacco is at 27 but national Flour is at 6 and Berger at 7.

In the financial sector, BNS is selling at a price earnings ratio of 23 while Guardian Holdings is at 8, Republic Bank is at 15 and National Enterprises at 16. Conglomerates Neal and Massy is at 11 compared to Ansa Mcal at 17. In media, Guardian Media is at 22 but One Caribbean is only at 13.

The graphs below highlights the potential gains for those that appear to be undervalued.

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TTSE: Unilever up, Clico down

Friday, 26th July 2013 | Overall market activity resulted from trading in 10 securities of which 2 advanced, 5 declined and 3 traded firm.

Trading activity on the First Tier Market registered a volume of 109,697 shares crossing the floor valued at $1,314,622.32. Sagicor Financial Corporation was the volume leader with 63,270 shares changing hands for a value of $385,947, followed by National Flour Mills with a volume of 30,000 shares being traded for $22,495. Unilever Caribbean contributed 9,789 shares with a value of $538,776, while Scotiabank Trinidad added 3,920 shares valued at $274,439.20.

Unilever Caribbean enjoyed the day’s largest gain, increasing $0.71 to end the day at $55.04.

Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 47,705 shares valued at $1,016,167.50 suffered the day’s greatest loss declining by $0.20 to end at $21.30.

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OCM profits growth slows

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One Caribbean Media revenues climbed 21 percent in the June quarter and 32 percent year to date over 2012. Profit after tax was up 10 percent in the latest quarter and 23 percent for the six month period. The growth in the second quarter is down on that of the first quarter when management stated that acquisitions and revenues flows from a state election in Tobago and elections in Barbados helped to boost revenues and profit for the March quarter by 40.4 percent.

OCM better results came as profits for the 3 months climbed to TT$20.3 million, up from TT$ 18.3 million in 2012, emanating from revenues which were up to TT$131 million. For the six months, profit after tax is up to TT$38.4 million from TT$31 million in the prior year. Both revenue and profits grew over the amount generated in the first quarter of this year.

Management is, however, cautioning as they did in the first quarter report when they stated that the second quarter will be tougher than the first but expect growth to continue. They are again sending a message of caution that the second half of the year will be more challenging.

Results comparison | The June quarter profit is just a shade off from the amount earned in the December 2012 quarter of $21.4 million from revenues of $145.7 million, as well as the amount earned in September quarter last year of $21.8 million from revenues of $132.6 million.

OneCaribbeanMedia280x150For most media houses, the first quarter of the calendar year is not usually the best in either revenues or profit as advertisers take a more moderate position in the first quarter coming out of the high expenditure of advertising during the Christmas period.

Profit 2012 | For the 12 months to December last year, earnings came to $74.75 million slightly up on the $69.45 million generated in 2011 from revenues of $495 million versus $451 million for non-interest income, an increase of 9.7 percent. Gross profit rose by 14.6 percent to $178 million from $155 million in 2011, showing greater level of efficiency in generating income.

Gross profit margin was 36 percent for 2012 up from 34.4 percent in 2011 is now up to 36.5 percent for the year to June reflecting a big improvement over the 32.6 percent generated in the first six months of 2012.

Financial health | The company is in a healthy financial position, generating annual cash flows of more than $70 million per annum, some of which it is using to acquire other income generating assets. Cash inflows could rise in the current year as profit seems poised to climb above that of 2012. Equity stands at $609 million with no debt and current asset ratio of more than 3 to 1, and cash funds of $144 million at the end of March. Funds are clearly being built up for further acquisitions.

Forecast | IC Insider continues to forecast profits of $95 million or $1.41 per share for the current year giving the stock a PE of 12.75 times earnings. Based on the Trinidad stock market PE ratio and Guardian Media which is at PE of 22, the stock is rated a buy for medium term appreciation, as the stock price could almost double based on these comparisons.

Insider call | OCM is now an IC Insider Buy Rated stock.

Related posts | OCM profits rise strongly 

 

TTSE: TCL up again but market quiet

Thursday, 25th July 2013 | Trading picked up from yesterday’s low levels with 13 securities being active on a day when prices  advanced for 2 stocks, 6 stocks declined and 5 traded firm as a moderate 133,066 units traded for a value of $2.73 million.

Sagicor Financial Corporation traded 43,075 shares changed hands for a value of $263,603, Trinidad Cement stock price made another move in gaining 12 cents to end the day at $1.32 with a volume of 23,959 shares traded for $31,605. The stock closed the day without any stock being offered for sale. ANSA McAL accounted for 15,071 shares valued $999,154, while Prestige Holdings added 13,360 shares valued at $124,916. Clico Investment Fund, posted a volume of 13,000 shares valued at $279,500 and the stock price declined by 49 cents to end at $21.50.

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

TTSE: Painfully slow Wednesday

Wednesday, 24th July 2013 | Activity on the Trinidad Stock Exchange was painfully slow on Wednesday as just 5 securities traded, of which 3 advanced and 2 traded firm as 18,244 shares crossed the floor of the exchange valued at $1,403,089.05.

Scotiabank Trinidad & Tobago traded 600 shares as high as $71.42 during the day, a new 52 weeks high, but the last traded price was the same as Tuesday at $70.01. West Indian Tobacco Company had 11,004 shares changing hands for a value of $1,298,472 as the stock put on 44 cents to close at $118. Angostura Holdings’ 4,515 shares traded for $40,725. One Caribbean Media chipped in with 1,125 units with a value of $20,250 as the stock price gained 39 cents to close at $18, a new 52 weeks closing high. National Flour Mills added 1,000 shares valued at $790.

Trinidad Cement did not trade but there is a bid at $1.24 which is above Tuesday’s price of $1.21 for 309,751 units.

IC Bid offer indicator| At the end of trading there were 3 stocks with bids higher than the lasts selling price and just one with the offer price being lower than the last price.

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TTSE: TCL dominance continues

Tuesday, 23 July 2013 | In Tuesday’s trading on the Trinidad & Tobago Stock Exchange, Trinidad Cement took the spotlight trading more than 94 percent of the shares that crossed the floor and more than a half of the value of trades, as 802,723 shares for a value of $963,268 changed hands. Since IC Insider recommended it as a buy in June, the stock is up 26 percent, closing at $1.20. At the end of trading the bid was above the last selling price at $1.21.  Unilever, one of our stocks to watch this week, had a bid at $56 compared with last selling price of $55.

There was trading in 14 securities of which 3 advanced, 5 declined and 6 traded firm. Clico Investment Fund enjoyed the day’s largest gain, increasing 17 cents to $21.99 as 5,600 of the fund’s shares valued at $123,144 traded. Readymix (West Indies) suffered the day’s greatest loss, falling 49 cents to close at $21.99 with just 5 shares trading as it reached a new 52 weeks low. Sagicor Financial Corporation had a volume of 35,457 shares traded for $220,739. Scotiabank Trinidad & Tobago contributed 2,102 units valued at $147,161, while ANSA McAL added 1,305 shares valued at $86,613.

Trading amounted to 850,676 shares valued at $1,686,190 as one stock reached 52 weeks low and one a 52 weeks high.

The number of stocks with bids that are higher than the last selling price is 2 with none having offers lower than the last sale price. At the end of Monday’s trading, 4 stocks had offers lower than the last selling price, 4 of these traded today wiping out the difference. The market has a large number of stocks without bids for some time, at the end of trading there were 10 such stocks. This is not a very bullish sign as the prices of many of these stocks will have to make a steep decline to encourage buying.

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TTSE: Increased breath, decreased volume

Monday, 22nd July 2013 | The number of shares traded on the Trinidad Stock Exchange was very low at the start of the week as just 101,000 units valued at $42 million traded. A total of 18 securities traded of which 2 advanced, 8 declined and 8 traded firm and one stock, BCB HOLDINGS declined by 30 cents to close at $11.60, a 52 weeks low.

Trinidad Cement which still remains an IC Insider buy rated stock, traded 30,000 shares for a value of $34,750 and closed up at $1.20, gaining 5 cents in the process. Neal & Massy Holdings with a volume of 18,005 units traded at $58.99, down a cent at a value of $1,062,115. Sagicor Financial Corporation contributed 15,660 shares with a value of $97,718 closing up 3 cents at $6.24, while National Enterprises added 11,693 shares valued at $187,088.

Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 23,400 shares valued at $510,628 as the price slipped by 13 cents to end at $21.82.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 1 stock was higher and 4 stocks had offers lower than their last selling price.

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Watching and rating

Monday, 22nd July 2013 | We’ll be watching to see what evolves during this week’s trading as we head into a period when companies start to release second quarter results. Our IC Insider “peep” behind the scenes, speaks a possible bull run since we see many instances where there’s a limited supply of stocks. Want to know more about the current demand and supply in the JSE? Read our market report Demand and supply tug of war.

Buy Rated Stock | Proven Wealth is new to our Buy Rated list. Before you buy, read our post, FX gains & securities boost Proven dated 4th June 2013, for an in-depth report of the company’s last reported results.

To search for published reports for a Buy Rated stock on IC Insider, please use ‘Search IC Insider’ and enter the company name, in full or in part.

Better than a broker’s ‘buy’ recommendation, IC Insider has no vested interest in any stock transaction or conflict of interest. Our research is backed by published reports of the company’s performance and insights of future earnings that can be found at ICInsider.com. The final decision to buy, or not, is your personal choice.

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TTSE: Subdued trading

Friday, 19th July 2013 | Trading stayed low on the final day of the week as only 124,988 units traded at a value of $5.8 million as trading took place in 7 securities of which 1 advanced, 4 declined and 2 traded firm.

ANSA McAL accounted for almost half of the volume that traded amounting to 60,416 shares at a value of $4,011,622. Jamaica’s based Grace Kennedy saw 15,000 of its shares traded for $54,150. Barbados based Sagicor Financial Corporation contributed 14,600 shares with a value of $90,666, while Republic Bank added 9,597 shares valued at $1,055,766. Clico Investment Fund traded 13,544 units valued at $297,268, declined 51 cents to close at $21.95. Scotiabank Trinidad & Tobago enjoyed the day’s sole price increase, climbing 4 cents while trading 4,331 units, to end the day at $70.01.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice market sentiment indicator shows that bids for no stock was higher with 5 stocks having offers lower than their last selling price.

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