National Commercial Bank (NCB)shares may not be trading in droves recently with the price tending to trade around $17 since early May but investors may be missing a great buying opportunity with a stock that is seriously undervalued.
In Trinidad the stock closed as low as TT$1.04 recently but has moved up to $1.10 on Friday and seems poised to go higher. The bid in Trinidad on Friday close was $1.10 (J$19.20) to buy 22,933 units with an offer of 26,000 units at $1.14. On Wednesday the stock traded 69,456 units at $1.08 and gained 2 cents in the process. On Friday 21,322 traded in Jamaica at $18.01 each and 1,396,013 on Thursday between $17 and $18.03. Wednesday saw 21,595 units being traded between $17.30 and $19. One important factor is that the stock is not in great supply.
But it’s the order book on the Jamaica Stock exchange that is sending a strong message to buy coupled with is a year when the results should help stimulate the stock price higher. There are only 280,000 shares on offer in the market but the buying interest is not particularly strong. With the pickup in trading in Trinidad, the price in Jamaica could get a lift and with third quarter results to June which are due in the last week in July, that could strengthen investor’s appetite for the stock and give it a badly need push.
IC Insider forecast earnings of $5 per share for the current year, so far NCB reported earnings of $2.38. For the first 6 months of the fiscal year.
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[…] increased by 0.83 points to end at 42.47. Gains| Stocks increasing in price at the close are, National Commercial Bank increased 12 cents to end at a 52 weeks’ high of $1.35 the equivalent of J$24.37 while it closed […]
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[…] National Commercial Bank gained $2.50 and Scotia Group $2.39 to help the Jamaica stock market to close at a two and a half year high on Thursday, resulting from the prices of 13 stocks rising and only 4 declining as 23 securities changed hands, ending in 6,535,906 units trading, valued at $19,861,234 in all market segments. strong> Main Market| The JSE Market Index gained 1,092.69 points to 84,083.29, the JSE All Jamaican Composite index rose 1,221.67 points to close at 92,727.31 and the JSE combined index gained 1,146.47 points to close at 85,718.39. IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 5 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower. […]
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[…] National Commercial Bank net profit for 2014 hit $11.6 billion, a big jump from the NDX affected $8.58 billion in 2013. Earnings per share for the year ended at $4.73 just below IC Insider forecast of $4.80. The 2013 profit was negatively affected by a huge $1.5 billion charge, from losses picked up when they exchanged high yielding government bonds for lower yielding ones and $680 million written off relating to the attempt to list on the New York Stock Exchange. The group is reporting net profit of $2.87 billion, for the September quarter compared to $1.8 billion in 2013, the latter was affected by a number of one off charges. The 2013 full year was also negatively impacted by a $281 million hit from receivership expenses, an increase over the amount spent in 2012 of $172 million and a healthy rise in Technical, consultancy and professional fees of $1.09 billion compared with $846 million in 2012. This year results benefited from a few one off items as well. Gain on acquisition of subsidiary contributed $301 million and gain on sales of shares in Kingston Wharves added $349 million but this is in lieu booking their share of profits for the quarter had they not sold. The group suffered a loss of $200 million on securities impairment and critically, although loan loss provision is up $200 million, the large increase in the final quarter is $700 million more than at the same time in 2013. For the full year, loan losses amount to $2.2 billion versus $2.1 billion for the previous year. Salaries allowances and benefits cost was down in the quarter to $2.6 billion from $2.9 in the similar quarter, and for the year to $11.5 billion versus $11.2 billion in 2013. Other operating cost was up to $10.4 billion for the full year, from $9.4 billion in 2013 and for the quarter $3.1 billion from $2.8 billion. Growth| For 2014, loans grew pretty strongly by 12 percent, moving from $143.6 billion to $157 billion and customer deposits of $202 billion, increased by $23.8 billion, or 13 percent, resulting in net interest income being steady, in the September quarter, for both years, as well as in the June quarter at roughly $6 billion each. Net interest income was up $1 billion for the year over 2013 to reach $24.66 billion from $23.56 billion. Fees and commission income moved up to $10.6 billion net, compared to $9.7 billion in 2013. Premium income grew to $7 billion from $5 billion in 2013. Gains on sale of debt securities and foreign exchange trading gains jumped to $2.6 billion versus $1 billion in 2013. Segment| Segment results were mixed with strong increases in some, while other areas fell below the 2013 performance. Retail & SME, reported improved profits for 2014 of $1.56 billion versus $793 million in 2013. Payment Services climbed down from $2.1 billion to $1.57 billion in 2014, Corporate Banking ended 2014 with $500 million versus $850 million previously, Treasury & Correspondent Banking jumped from $1.87 billion in 2013 to $3.7 billion in the latest year. Wealth, Asset Management and Investment Banking moved down from $3.88 billion to $3.6 billion, Life Insurance and Pension Fund Management climbed from $2.17 billion to $2.9 billion and General Insurance income of $557 million in 2013 jumped to $1.28 billion. NCB hiked their final dividend for the year to 96 cents per shares. IC Insider’s forecast for the 2015 earnings is $5.75 per share and with the current price at just over $18 per share the stock is severely undervalued with significant upside potential. […]
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[…] September 1. The company had previously reported a purchase of shares by a directors on August 29. NCBJ reported good gains in profit for the nine moths to June this year with IC Insider forecast of […]
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[…] shares in closing 20 cents lower at $34, Gleaner with 12,800 shares while losing 2 cents to $1.10, National Commercial Bank 10,442 shares traded with a 50 cents loss at $18.40 and Scotia Investments had only 1,589 units […]
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[…] National Commercial Bank reported impressive results for the nine months ended June 2014 compared with the nine months ended June last year. Net profit reported is $8.8 billion, an increase of 29 percent, or $2 billion for the nine months. For the latest quarter, net profit of $2.9 billion was made, an increase of 29 percent, from $2.27 billion in June 2013. Earnings per stock unit amounted $3.56 and is set to get to $4.80 per share for the full year. Gross revenues of $42 billion increased 17 percent, or $6 billion from $36 billion generated in 2013. As impressive as the results may appear two things have to be borne in mind, one is that in 2013 a large charge was incurred flowing from government of Jamaica debt swap, and the segment accounts show a mixed picture with just four out of the seven segments contributed to the improvement, as the others, recorded declines for the nine months. On the plus, was a $550 million reduction in loan loss provision, from $1.78 billion to $1.24 billion, with this year’s June quarter being $357 million or roughly half of what it was in 2013. Staff cost a bit item, is up a bit, year over year, but part of that was due to the general insurance company coming into the group, for a part of the year. A more telling picture is seen form the quarter over quarter figures of $2.86 billion versus $2.7 billion for June 2013 quarter, which was marginally up. Loans| Loans and advances, totaling $152 billion net of provision for credit losses at June 2014, grew by 12 percent, or $16.8 billion, compared to the loan portfolio as at June 30, 2013. Non-performing loans totaled $7.8 billion as at June 2014 ($6.6 billion at June 2013) and represented 5 percent of the gross loans compared to 4.8 percent as at June last year. Deposits| Customer deposits were $205 billion, up 19 percent or $33 billion over the prior year. The increase was driven by growth in fixed deposits and savings portfolios, which increased by 65 percent and 10 percent respectively, over the prior year. Capital| The Group’s stockholders’ equity stood at $78 billion, up 12 percent over the prior year. The stock traded last at $18 and puts the PE ratio, at just 3.7 times the current year’s results. NCB declared another dividend of 35 cents per share, bringing the total in the last twelve months to $1.18. NCB remains a strong IC Insider buy rated stock. […]
[…] National Commercial Bank (NCB) closed on the 28th of April at $28, that is up a strong 65 percent form the price of $17 in May last year. With the realisation that the stock was heavily undervalued, in June last year IC Insider had this to say about the stock. The shares may not be trading in droves recently with the price tending to trade around $17 since early May but investors may be missing a great buying opportunity with a stock that is seriously undervalued. In Trinidad the stock closed as low as TT$1.04 recently but has moved up to $1.10 on Friday and seems poised to go higher. The bid in Trinidad on Friday’s close was $1.10 (J$19.20) to buy 22,933 units with an offer of 26,000 units at $1.14. On Wednesday the stock traded 69,456 units at $1.08 and gained 2 cents in the process. On Friday 21,322 traded in Jamaica at $18.01 each and 1,396,013 on Thursday between $17 and $18.03. Wednesday saw 21,595 units being traded between $17.30 and $19. One important factor is that the stock is not in great supply. But it’s the order book on the Jamaica Stock Exchange that is sending a strong message to buy coupled with is 2014 being a year when the results should help stimulate the stock price higher. There are only 280,000 shares on offer in the market but the buying interest is not particularly strong. With the pickup in trading in Trinidad, the price in Jamaica could get a lift and with third quarter results to June which are due in the last week in July, that could strengthen investor’s appetite for the stock and give it a badly needed push. IC Insider forecasts earnings of $5 per share for the current year (2014), so far NCB reported earnings of $2.38 for the first 6 months of the fiscal year. Well NCB went on the report $4.73 per share for the year to September but it took a long time for the stock to rise. Like good cream, goods stocks will eventually rise. Not only has the stock posted strong gains, investors in it have had a very good payment with increased dividends. Interesting while all the potential was there, there are investors who sold around the $17 price level and moved into Alibaba, it being the rage then. The returns of the former speaks volumes about investing in what is known and buying undervalued stocks as Alibaba has gone nowhere since last year while NCB has grown and is heading higher yet. […]