Trading levels on the Trinidad stock market on Monday was moderate with 12 securities changing hands of which 3 advanced 4 declined and 5 traded firm with 63,104 stocks trading with a value of $$1,443,488 with two stock reaching new 52 weeks high.
The Composite Index lost 2.17 points to close at 1,180.84, the All T&T Index rose fell by just 4.26 points to close at 2,026.54 and the Cross Listed Index eased by a mere 0.01 points to end at 43.91.
Gains| Stocks increasing in price at the close are Neal & Massy gained 5 cents to end the day at $68.85 while exchanging 871 units, to end at another 52 weeks high, Prestige Holdings added 3,755 shares valued at $35,335 to end at $9.41 up a cent and Unilever with 1,500 shares closed a cents higher at $62.01 for a new 52 weeks high.
Declines| The stocks declining at the end of trading are National Enterprises was the volume leader with 21,594 shares changing hands for a value of $404,911 and fell 25 cents to close at $18.75, Sagicor Financial Corporation with 3,375 shares to close with a one cent loss at$6.73, Scotiabank contributed 6,501 shares with a value of $452,578 while closing 17 cents lower at $69.61 and Scotia Investments lost a cent to close at $1.55 while trading 3,300 units.
Firm Trades| Stocks closing with prices unchanged at the end of trading are Clico Investment Fund had a volume of 9,843 shares valued at $211,625 to remain at $21.50 followed by Guardian Holdings with 8,552 shares traded for $126,142 to close at $14.75, Jamaica Money Market Brokers with only 2,000 units to close at 45 cents, One Caribbean Media 1,313 to close at $23, Trinidad Cement 500 shares, closed 1.95.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 2 stocks with the bid higher than the last selling price and 5 stocks with offers that were lower.
Two new highs as 3 stocks rise
Securities traded up but prices mixed
There was trading in 16 securities on the Trinidad Stock Exchange on Wednesday, 4 advanced, 3 declined and 9 traded firm, as 157,712 shares traded with a value of $1,646,580.
Market activity lead to two new 52 weeks highs and moderate movements in the indices, with the Composite Index edging up 0.43 points to close at 1,169.87, the All T&T Index gaining 1.73 points, to close at 1,985.33 and the Cross Listed Index declining by 0.12 points to 46.49.
Gains| First Citizens Bank contributed 17,200 shares with a value of $596,996 and gained 70 cents, to close at $34.70, Praetorian Property Fund advanced by a cent to end at $3.41, as it traded 2,000 units, Republic Bank traded a mere 83 units, as the price moved up a cent, to close at $120.17 for a new 52 weeks high and Unilever Caribbean traded just 31 shares to close 2 cents higher at $58.22, a new 52 weeks high.
Firm Trades| Stocks trading with unchanged closing prices, are Angostura Holdings with 16,470 shares valued at $181,170, to close at $11, Flavorite Foods with 33 units at $7, Grace Kennedy with 45,600 shares changing hands for a value of $159,600 and closed at $3.50, National Flour Mills 10,000 shares at $1.26, Neal & Massy 100 shares at $66.31, Prestige Holdings 500 units at $9.35, Scotiabank 138 shares at $71, Trinidad Cement 895 units at $2.06 and West Indian Tobacco 216 units at $118.
Declines| Clico Investment Fund traded 13,277 shares valued at $288,603 as the price declined by 15 cents, to end at $21.70, Jamaica Money Market Brokers traded 6,300 shares to close down 2 cents to 54 cents and Sagicor Financial Corporation with a volume of 44,667 shares traded for $312,669 as the price shed 3 cents, to end at $7.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with bids higher than their last selling prices and 3 stocks with offers that were lower.
Unilever Q2 profits up
Investors who owned Unilever stock from 2010 would have been very happy as the stock price has benefited from the impact of lower interest rates and some profit growth resulting in the stock price more than tripling.
But profits have lagged the stock price performance. For example, for the 3 months to June this year, profits are up to $14.4 million after tax, compared to $12.6 million in 2012 an increase of 14 percent increase. For the 6 months, profit is higher by 13.6 percent to $27.4 million, that is just a few points below the near 17 percent increase in stock price this year, the stock seems poised to increase in price even more than it has done so far. For the 3 months to March this year, profit was up to $13 million after tax, compared to $11.9 million in 2012. The June quarter represents a higher increase than that enjoyed in the first 3 months of the year.
Revenues up | Revenues which climbed to $133.6 million in the first quarter, grew to $147.3 million in the June quarter, up from $142.2 million for June 2012 quarter. For the 6 months, revenues are up from $269.7 million for the same period last year to $280.9 million this year, a mere 4 percent increase.
Stock price | Unilever’s 17 percent stock price growth this year so far is ahead of the gain in earnings and is 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 stock seems poised to rise further as demand exceeds the supply of the stock on the Trinidad market. When stock prices rise much faster than the growth in profits, it is time to take serious note of what is happening. Investors in such stocks should be fully conversant with what are the factors at play to ensure their investment can be properly protected if, and when, the factors change.
Unilever products – Unilever Caribbean continues to trade at new highs virtually each time it trades.
The company | A subsidiary of Unilever PLC, a United Kingdom company, and based in Trinidad, the company 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.
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.
Big quarter | 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 the IC Insider’s projected earnings of $1.58 per share for 2013. Presently at a stock price of $55, this is up from 14 times in 2011 and 11.5 for 2010.
Improved margin | Unilever is not doing exceptionally well in a tight economy but it is clearly enjoying areas of success reflected in good growth in some of it products. Management earlier this year expressed concerns about rising input cost for some of the products it manufactures and competition from cheaper products. From all indications, management seems to have managed to be steering the operations well, resulting in improved margins and continued growth in profit. Gross margin climbed to 66.2 percent in the June quarter, up from 63.8 percent in the first quarter and up from 63.7 percent for the twelve months of 2012 and is a continuation of the marked improvement seen for 2012 over the 59.2 percent in 2011.
While cost increase seems to be under control for the first quarter in 2013 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.
In the latest quarter, sales & marketing cost is flat with 2012 but administrative cost climbed 38 percent to $10 million, a change to the flat numbers in the first quarter. While for the 6 months, sales & marketing cost is flat with 2012 but administrative cost is up 20 percent and is up faster than revenues are growing.
The company boast equity capital of $156 million, has no interest bearing debt and a high current asset ratio with liabilities almost covered twice over.
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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.
For 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.