Paramount
Iron Rock Insurance entered the junior list as operating results fall behind forecast.
There seems to be little rationale for Cargo Handlers to be selling at a PE of 35 based on estimated 2017 earnings and worse 51 times 2016 earnings. The stock is selling well in excess of the average market and the next highest valued in the junior market, Honey Bun that is at a PE of 21, based on 2016 earnings but a more moderate 14 times projected 2017 earnings.
It not surprising that Cargo Handlers heads the list of most overvalued stocks on both the main and junior market, followed by Kingston Wharves and 138 Student Living.
Iron Rock projected losses in the prospectus for 2016 of $30 million and a small profit of $3 million which includes foreign exchange gains of $7 million in 2018. Year to date losses to September last year, are running well ahead of the prospectus’ forecast with losses of $38 million with the September quarter’s losses ended at $14 million. More worrying is that projections of gross premium income of $169.36 million in 2016 rising to $414.97 in 2017 are well off what seems to be occurring in 2016 with results for the nine months showing gross premium of just $59 million well below forecast by $110 million. With all of this happening investors pushed the stock up to $4 for a premium above the listed price.
In addition C&W that focused attention on data service, is seeing that strategy paying rich dividends. The company reported just a small loss of $200 million in the September quarter and seemed to be on the way to making positive profit for 2017 onwards, with revenues growing 15 percent in the quarter and 13 percent for the six months. On the other hand Digicel is struggling as the market has moved towards data than voice and C&W grabs a larger share of the mobile market locally, leading Digicel to be looking at a sharp cut in staff numbers in the not too distant future.
Not many investors seem to see this picture, instead they focus on the short term developments, raising foolish questions about dividend payments and debt, when the two can’t be avoided. Under the companies Act dividends can’t be paid based on the large accumulated losses that have to be cleared first, while debt has been used to support the operations while it went through restructuring. The company is now cash flow positive and that should lead to debt reduction going forward subject to any large acquisition. Some minority shareholders who sought legal advice indicates that there were transactions that were effected that were not in the interest of the company.
Gains| Guardian Holdings climbed 10 cents to $13 with 141,279 shares changing hands, valued at $1,836,627.
The main market of the Jamaica Stock Exchange, lost some more grounds at the close on Friday but the junior market hit a new closing high, even as advancing stocks beat out declining ones 2 to 1.
Investor’s Choice bid-offer indicator reading shows 9 stocks with bids higher than their last selling prices and 4 with lower offers.
JMMB Group traded 23,852 units and gained 19 cents to end at $15.20. National Commercial Bank traded 30,975 shares to close at $52, 138 Student Living ended trading with 30,734,795 shares at $4.50, Portland JSX traded 12,922 units at $10.25 after falling 72 cents. Sagicor Group closed with 246,978 shares changing hands with a rise of 94 cents to end at $29.04, Scotia Group with 88,319 shares changing hands, rose 1 cent to close at $35.02, Scotia Investments with 24,440 units trading, ended at $31.50, Seprod traded 5,546 shares in closing at $30. Supreme Ventures traded 50,536 units to gain 29 cents to close at $5.40 and Proven Investments traded 11,998 ordinary share to close at 22 US cents.
An average of 104,395 units with an average value of $710,258 traded, compared to 46,481 units with an average value of $264,385 on the preceding trading day. The average for the month to date is 81,154 units with an average value of $438,934 versus 78,249 units with an average value of $405,018 on Thursday. The average for December is 131,147 units, at an average of $672,488.
to close at $7, with just 2,000 shares being exchanged by investors, Key Insurance traded 34,688 units to close at $3.10 after gaining 10 cents, to end at a 52 weeks’ closing high. KLE Group ended with 800 units changing hands at a 52 weeks high of $2.50. Lasco Distributors ended with 607,149 units trading, to close 3 cents higher at $7.03, Lasco Financial lost 25 cents with 122,767 shares changing hands, to end at $3.70. Lasco Manufacturing ended at $5.15, with 58,461 units trading, Medical Disposables closed with a rise of 5 cents at $4.50 with 16,500 shares changing hands and Paramount Trading ended with 87,972 shares changing hands at $3.55 to gain 15 cents.
Caribbean Cream fell $1 to $7 while trading 199,000 units in response to the company posting profit of $19 million in the November quarter, down from $39 million in the same period in 2015. Profit for the year to date is up to $137 million from $124 million in 2015. More trading took place with 1,000 units at $7.50 but 300,000 units were offered at $7.45.
AMG Packaging hit a new high of $32.55 and Blue Power traded at a new high of $35.50.
Firm Trades| Angostura Holdings closed at $14.70, with 12,025 units changing owners, Clico Investments held firm at $22.60 with 581 shares being exchanged, First Citizens closed trading at $34.97 with 55 units changing hands, National Commercial Bank was unchanged at $3.10 with an exchange of 50,000 shares. National Flour closed at $2.40 with only 10 units being traded, Prestige Holdings ended trading at $11 with 164 shares changing hands, Scotia Investments held firm at $2.10 with trades of 112,000 units and Scotiabank closed at $58.75 with 786 shares changing ownership.
The main market of the Jamaica Stock Exchange, lost some more grounds at the close on Thursday but the junior market hit a new closing high, even as advancing stocks beat out declining ones 3 to 1.
IC bid-offer Indicator| At the end of trading in the main and junior markets, the Investor’s Choice bid-offer indicator reading shows 13 stocks with bids higher than their last selling prices and 5 with lower offers.
National Commercial Bank traded 85,928 shares while rising of $1 to close at $52, Pan Jam Investment traded 6,975 shares and rose 8 cents to close at $26.60, Portland JSX traded 16,000 units at $11. Pulse Investments ended at $4 with 21,600 units changing hands, Sagicor Group closed with 25,000 shares changing hands with a loss of 40 cents at $28.10. Scotia Group with 28,023 shares changing hands, rose 51 cents to close at $35.01, Scotia Investments gained 40 cents with 38,160 units trading, to end at $31.50, Seprod traded 9,152 shares to gain 5 cents in closing at $30. Proven Investments traded 86,500 ordinary share to close at 22 US cents and JMMB US 6% preference shares ended at US$1.11, with 65,240 units changing hands.
The market closed with 8 stocks with bids higher than their last sale and 2 with lower offers than their last sale.
General Accident traded 9,000 shares and lost 18 cents to close at $3, Honey Bun had 36,080 shares changing hands, to close at $5.80, after rising 30 cents. Iron Rock Insurance traded 28,053 units and fell by 10 cents to end at $4, Lasco Distributors ended with 37,600 units trading, to close at $7. Lasco Financial rose 28 cents with 47,364 shares changing hands, to end at $3.95, Lasco Manufacturing gained 15 cents to end at $5.15, with 103,347 units trading, Paramount Trading ended with 180,590 shares changing hands at $3.40 to gain 40 cents and tTech ended with 36,904 units changing hands at $5.50 after rising 40 cents.
