Some positive signs are emerging in the local stock market, with a few stocks in the Main Market making new highs repeatedly. Elsewhere, inflation is down and the fall in BOJ CD rates since early March from 10.54 percent to this week’s 8.11 percent, a 23 percent fall, are signs that interest rates locally have softened and set to fall across the board before long.
The above are positive signals for stocks. Some stocks are worth holding or watching as they possess the assets and earnings potential to deliver above average returns in stock value for patient investors but are not likely to gain as much as those in the ICTOP10 lists.
These stocks are Transjamaican Highway, Access Financial, Dolphin Cove, Honey Bun, Lasco Financial, Lasco Manufacturing, Main Event, Stationery and Office Supplies and Wigton Windfarm.
In the stock market, there is a time to hold, a time to fold and be bold that is the case of investing in Transjamaican Highway. The stock that came to the market in 2020 at $1.41, which many touted as reasonably priced, lagged the IPO price until this year and is worth seriously considering.
Transjamaican Highway has moved away from the zone of the IPO price of $1.41 at the end of March and now sits at $1.77, with the stock trading in high volume. Why would a stock that the company reported a loss of US$7 million? First, acquiring the majority shares in Jamaica Infrastructure Operators resulted in a onetime loss of US$13.7 million, the only reason for the company to report a loss for the year. The transaction will result in future cost savings expected to significantly reduce Operating Expenses by more than 50 percent or US$12 million per annum and increase profitability in the future. ICInsider.com projects earnings per share of 0.016 US cents or J$0.24. A technical indicator is pointing to a short term price around $2.40.
Staff members of Main Event
Main Event has been on a tear following impressive first quarter results of $118 million or 39 cents per share. The stock gained 64 percent for 2023 to date and 227 since the start of 2021. ICInsider.com projects earnings per share of $1.70 for the current year and a stock price hitting $30 by the end of 2023. Interestingly, while revenues for the recent quarter were a record $626 million, marginally up on the $597 million generated in the 2019 first quarter, there is more room for growth as the economy returns to normal levels since the contraction over the past two years. it is noted that the company is involved in the staging of JMEA expo this year and that will bring in added revenues that were not there last year.
Honey Bun just dropped out of the ICInsider.com TOP10 but has room for more upside price movement, with revenues up 23 percent for the first quarter to December last year and profit surging 64 percent to 94 million before taxation. ICInsider.com projects a 25 percent rise in revenues for the current year, with earnings doubling to 90 cents per share over that of 2022. Those numbers should be enough to increase investors’ interest in the stock with an improved gross profit margin that slipped last year, helping boost profit.
With the first quarter results due out over the next three weeks for Access Financial, Dolphin Cove, Stationery and Office Supplies and full year results for Lasco Financial and Lasco Manufacturing, investors will see that these stocks are seriously undervalued.
Wigton Windfarm has been quietly hitting new 52 weeks highs. It could go higher as investors buy up what has become limited supply in recent weeks as the company venture into additional business activities. Technically the stock has broken out of a long consolidation phase and the trend indicates a higher price of around 90 cents before it is stopped.
Persons who compiled this report may have an interest in securities commented on.
