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Change in ICTOP10 picks

Mid-year results are now flowing unlike anything seen in the local market in recent years. Most companies reported gains in revenues and profits, but investors’ interest seems lukewarm in the aftermath of the results, even as interest in ICTOP10 number 1 stock, Radio Jamaica (RJR) continues to be robust as more investors turn their eyes to what is a major turnaround in fortunes.
GraceKennedy reported continued strong numbers, showing improvement in revenues and profit, so too did Caribbean Cement and Berger Paints. Investors don’t seem to buy into Berger’s major change in operations and the implication for profit from the major surge in revenues. Based on the six months numbers, the company’s earnings for 2021 is upgraded to $2 per share. All three Lasco companies reported improved revenues and profit for the June Quarter, but the stocks are stuck at prerelease prices.
Investors should ignore the lukewarm response now and accumulate some of these stocks to profit from later in the year when the inevitable buying comes in for them. Access Financial reported improved results for the June quarter after reporting modest gains in lending. NCB Financial also released results but the details suggest caution, with the performance being helped by onetime income or cost reduction. Jamaica Stock Exchange reported improved June quarter numbers, but improvement is not strong enough to justify the current price the stock trades at.
Sterling Investments returns to the TOP10 Main Market listing, after replacing Scotia Group that recorded a rise in its price from last weeks’ $38.75 to $42 at the close of trading on Friday. There are no changes in or out of the Junior Market list.
The top three stocks in the Junior Market, continue, with Elite Diagnostic, followed by Caribbean Assurance Brokers and Medical Disposables, with the potential to gain between 221 percent and 287 percent compared to 237 and 291 percent, last week. The top three Main Market stocks are Radio Jamaica in the number one spot, followed by JMMB Group and Guardian Holdings, with expected gains of 184 to 296 percent, versus last weeks’ 183 to 292 percent.
This past week the average gains projected for the Junior Market, moved up from 202 percent last week, back to 207 percent and Main Market stocks moved to 173 percent from 164 percent.
The Junior Market closed the week with an average PE 13.3 based on ICInsider.com’s 2021-22 earnings and currently trades well below the target of 20 as well as the recent historical average of 17, for the period to March this year based on 2020 earnings.
The JSE Main Market ended the week with an overall PE of 16.4, a little distance from the 19 the market ended at in March, suggesting just a 17 percent rise at a PE of 19 and 23 percent at a PE of 20 from now to March 2022. The Main Market TOP 10 trades at a PE of 7.6 or 46 percent of the PE of that market, well off the potential of 20.
For the Junior Market to trade at the historical average, the PE Ratio would have to rise 28 percent and requires a rise of 50 percent to reach the targeted PE of 20 by March 2022. Main Market stocks would have to rise by 17 percent to hit a PE of 19 and 23 percent to get to the target of 20. The Junior Market Top 10 stocks average PE is a mere 6.7, just 50 percent of the market average, indicating substantial gains ahead.
The TOP10 stocks are not always the best stocks in the market but ones that are most likely to be the best winners within a fifteen months period. IC ranked stocks to filter out the big winners, allowing investors to focus on potentially big winners and help to keep out emotional attachments to stocks.
 IC TOP10 stocks are likely to deliver the best returns up to March 2022 and ranked in order of potential gains, based on likely increase for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. Revisions to earnings per share are ongoing, based on receipt of new information.

Persons who compiled this report may have an interest in securities commented on in this report.


Profit up for Jamaica Stock Exchange

Fee income climbed 23 percent from $273 million in the 2020 June quarter to $336 million and rose marginally for the year to date to $646 million from $635 in 2020, but income from other sources was mainly flat to declining in both periods for the leading stock exchange in the Caribbean operated by the Jamaica Stock Exchange.
Revenues climbed 16.7 percent in the latest quarter to $442 million from $378 million in 2020 and for the six months, revenues fell from $887 million to $852 million as trading activity on the market remains subdued, with the main market still trading well below the highs of 2020 and financial stocks that dominate the market capitalization, mostly out of favour. Segment results show a $200 million decline in revenues as a result of lower trading activity on the stock market. Investment income was essentially flat at $10 for the quarter but fell from $32.6 million in 2020 for the half year to $24.6 million in 2021.
While revenues fell year to date, expenses for the half year rose 2.6 percent to $590 million from $575 million even as fees payable to the Financial Services Commission slipped from $27 million to $20 million. For the June Quarter, expenses rose by 10 percent, from $259 million to $285, with staff cost climbing 23 percent to $136 million from $110 million in 2020. Taxation gobbled up $51 million for the June quarter and $91 million for the half year.
The operations generated gross cash flow of $315 million, after an increase in working capital, the amount was reduced to $266 million and after acquiring investments, purchasing fixed assets and paying $112 million in dividends, the company reduced the cash funds of $140 million at the end of 2020 by $19 million. Net current assets ended the period at $540 million, with current assets of $892 million. Current liabilities at the end of the half year amount to $352 million. Trade and other receivables amount to $286 million, cash and bank balance $121 million and investments $434 million. At the end of June, shareholders’ equity stood at $1.8 billion, with no borrowings used in funding its operation.
Looking forward, the last half of the year tends to be more bullish than the first half. As the local economy continues to recover from the 2020 depression, greater activity in the wider economy is likely and should result in improved profitability of listed stocks, resulting in increased demand for them. Additionally, there will continue to be more listings that will generate fixed fees for the exchange and fee income based on trading in the stocks of the additional listings going forward. The exchange could also improve its results if it took a critical look at its fee structure, with a move to generating more fixed fee income and reduced reliance on varying fee income, which is the way it was in years gone by until some fixed fees were frozen for many years and have not changed much since. Short term, the stock may be considered overpriced, longer term, but it offers good growth potential with a decent dividend yield.
Earnings per share ended the June quarter at 17 cents and the six months at 27 cents and could end the year around 70-80 cents, depending a great deal on trading activities in the second half of the year.  The stock last traded at $17.79 on the Main Market of the Jamaica Stock Exchange with a PE ratio of 24 times 2021 earnings, in contrast to an average of 16.4 for the Main Market.  Net asset value was $2.57 at the end of the quarter, with the stock selling at 6.9 times book value.

Profit jumps 33% at Carreras but..

Sale revenues for the June quarter this year jumped 27 percent to $3.4 billion at Carreras, from a depressed $2.7 billion in 2020, with profit after corporate taxes surging 33 percent to $863 million from $651 million in 2020.

Carreras is one of Jamaica’s best dividend payers

The latest results, while looking impressive, have resulted mainly from a 27 percent fall in revenues in the 2020 June quarter from revenues of $3.458 billion in 2019. The 2021 profit is lower than the $923 million aftertax profit earned in 2019.
Cost of goods sold rose faster than revenues with a 30 percent increase from $1.37billion to $1.78 billion percent. Other operating and administrative expenses, including finance costs, rose four percent from $514 million in the 2020 quarter to $536 million.
The operations generated gross cash flows of $820 million, but after paying dividends of $1.2 million, resulting in a reduction of $786 million in cash on hand at the end of March. At the end of the quarter, shareholders’ equity stood at $1.75 billion, with lease financing at $251 million. Current assets ended at $3.47 billion, including cash and equivalent of $1.4 billion and Receivables of $1.56 billion. Current liabilities ended at $2 billion.
Earnings per share came out at 17.8 cents for the quarter, with ICInsider.com forecasting 80 cents per share for the year to March 2022, with a PE of 11.5 times earnings at the last traded price of $9.19 for the stock on the Main Market of the Jamaica Stock Exchange. The stock is now mostly regarded as a good dividend payer with a high yield of 8 percent, with profit hardly growing as the product it sells is not expected to enjoy much growth.

Junior Market rallies to close out July

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The market closed on Friday, with the volume of stocks traded declining by 33 percent and the value slipping 29 percent from Thursday outcome, after 34 securities traded, similar to Thursday, with prices of 12  rising, 10 falling and 12 closing unchanged leading the Market Index to spike 14.49 points to close at 3,322.77 on the Jamaica Stock Exchange Junior Market.
The market that closed at 3,370.59 points in June, tried to build on it during July, moving up to 3,421.90  points in Mid-month, failed to hang on to the gains and end up closing below the June close. The PE Ratio, a measure used to compute appropriate stock values, averages 13.2 based on ICInsider.com’s 2021-22 earnings forecast.
Trading ended with 2,153,858 shares changing hands for $7,010,164 compared to 3,204,788 units at $9,817,160 on Thursday.
Future Energy Source led trading with 26.2 percent of total volume, after an exchange of 563,890 shares, Jamaican Teas followed with 21.5 percent, for 462,064 units and Tropical Battery 11.2 percent with an exchange of 240,306 units.

Trading averaged 63,349 units at $206,181 in contrast to 94,258 at $288,740 on Thursday. Month to date, trading averages 163,918 units at $481,755, versus 168,538 units at $494,416 on Thursday. June closed with an average of 225,705 units at $644,459.
 Investor’s Choice bid-offer indicator shows eight stocks ending with bids higher than their last selling prices and one with a lower offer.
At the close, Access Financial jumped 85 cents to $21.49 with an exchange of 548 shares, AMG Packaging advanced 15 cents to $1.65 with 4,855 stocks changing hands, Blue Power fell 32 cents to $3.26 with 10,603 stock units traded. Caribbean Flavours gained 9 cents to close at $2.07, with 2,512 units passing through the market, Elite Diagnostic slipped 5 cents to $3.10 with a transfer of 482 shares, Future Energy Source lost 12 cents to finish at $1.38 with an exchange of 563,890 stocks. GWest Corporation declined by 5 cents to 94 cents with 10,000 units changing hands, Lasco Distributors dropped 16 cents to $4.04 with 1,222 stock units traded, Lumber Depot fell 10 cents to $3.30, with 15,040 shares passing through the market. Main Event climbed 43 cents to $4.79 with a transfer of 13,551 units, Medical Disposable  jumped 46 cents to $4.99 with investors switching ownership of 13,999 stocks and Stationery and Office Supplies shed $1.49 to close at $5.76 with 13,525 shares crossing the exchange.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.

Stocks closed out July mixed on the TTSE

Market activity ended on Friday, with a 375 percent spike in the number of shares trading, with the value surging 485 percent above Thursday outturn, resulting in an equal number of stocks rising and falling at the close of trading on the Trinidad and Tobago Stock Exchange.
At the close, 18 securities traded compared to 15 on Thursday, with an equal number of six rising, declining and remaining unchanged. The Composite Index dipped 3.14 points to 1,417.48, the All T&T Index shed 0.19 points to 1,929.85 to close out July with a modest gain over just over one percent for the month, leading to a rise of 8.9 percent year to date. The Cross-Listed Index slipped 0.88 points to settle at 121.81.
A total of 182,034 shares traded for $4,513,902, up from 38,309 units at $772,201 on Thursday. An average of 10,113 units traded at $250,772 compared to 2,554 at $51,480 on Thursday. The average trade for the month to date amounts to 20,941 units at $221,073 versus 21,495 units at $219,555. The average trade for June amounts to 45,770 units at $724,497.
The Investor’s Choice bid-offer indicator shows four stocks ended with bids higher than their last selling prices and none with lower offers.
At the close, Angostura Holdings rallied 6 cents to $16.49 after trading 298 shares, Ansa Mcal spiked $1.50 to $59 in exchanging one unit, Calypso Macro Investment Fund settled at $16.22 in switching ownership of 836 units, Clico Investment Fund fell 50 cents to $27 in switching ownership of 4,833 stock units. First Citizens Bank climbed 20 cents to $50.20 in an exchange of 43 shares. GraceKennedy closed at $6.15 in switching ownership of 223 units, Guardian Holdings fell $1.25 in ending at $32.50 after trading  30,221 units, JMMB Group inched 1 cent higher to $2.03, with 21,440 stock units changing hands. L.J. Williams B share ended at $1.50 with an exchange of 7 stock units, Massy Holdings spiked 40 cents to $80.50 in switching ownership of 49 stocks, National Enterprises advanced 5 cents to $3.90 after 21,504 shares changed hands. National Flour Mills closed at $2 with the swapping of 500 stock units. NCB Financial Group declined 15 cents to $8 after exchanging 10,000 units. Republic Financial Holdings slipped 5 cents to $135.50, with 674 stock units crossing the market. Scotiabank settled at $59 after exchanging 30,329 stock units, Trinidad & Tobago NGL dipped 2 cents to $17.50, finishing, with 29,082 units changing hands, Unilever Caribbean ended at $16.33 while exchanging 15,605 stocks and West Indian Tobacco dropped 49 cents $32 after 16,389 stock units crossed the exchange.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.

Junior Market ekes out gains on Thursday

Trading closed with the Junior Market advancing, with a modest rise in the market index on Thursday as the volume of stocks traded plunged 75 percent and the value dipped 76 percent from Wednesday and leaving declining stocks muscling out those rising.
A total of 34 securities traded on Thursday, up from 33 on Wednesday and ended with the prices of 11 stocks rising, 13 declining and 10 closing unchanged.
At the close, the Junior Market Index squeezed out a gain of 5.52 points to finish at 3,308.28. The PE Ratio, a measure used to compute appropriate stock values, averages 12.9 based on ICInsider.com’s 2021-22 earnings forecast.
Trading ended with 3,204,788 shares changing hands for $9,817,160 down from 13,080,154 units at $40,382,215 on Wednesday. Future Energy Source was the volume leader with 36.2 percent after trading 1.16 million shares, Lumber Depot followed, 11.9 percent, with 382,752 units and Fontana 10.6 percent, with 340,798 units.
Trading averaged 94,258 units at $288,740 in contrast to 396,368 at $1,223,703 on Wednesday. Month to date trading averages 168,538 units at $494,416, versus 172,116 units at $504,321 on Wednesday. June closed with an average of 225,705 units at $644,459.
Investor’s Choice bid-offer indicator shows three stocks ending with bids higher than their last selling prices and four with lower offers.
At the close, Access Financial dropped 85 cents to $20.64 with an exchange of 2,738 shares, AMG Packaging slipped 5 cents to $1.50 with 200,000 stocks changing hands, Blue Power lost 5 cents to end at $3.58 with a transfer of 9,020 units. Caribbean Cream dipped by 7 cents to $5.88 with 46,990 stock units traded, Caribbean Flavours fell 9 cents to $1.98, with 157,522 shares passing through the market, Elite Diagnostic rose 5 cents to $3.15 in exchanging 1,710 units. Express Catering shed 59 cents to finish at $5.40 with 11,054 stock units changing hands, Honey Bun rallied 23 cents to $6.75 with a transfer of 99,760 shares, iCreate popped 6 cents to 86 cents with 21,745 units traded. Indies Pharma rose 10 cents to $3.60 with investors switching ownership of 7,036 stocks, Jamaican Teas added 6 cents to settle at $4.02, with an exchange of 218,068 stock units.Knutsford Express spiked 49 cents to $7.69 with 240 shares changing hands. Lasco Distributors spiked 39 cents to $4.20 with a transfer of 180,263 units, as investors responded positively to the company’s first quarter results that saw profit rising by 58 percent. Lasco Manufacturing gained 5 cents to close at $5.25 with 79,177 stocks traded, Lumber Depot rose 5 cents to $3.40 with investors switching ownership of 382,752 stock units, Main Event dropped 94 cents to $4.36, with 3,170 units changing hands and Stationery and Office Supplies advanced 10 cents to $7.25 with 13,696 shares crossing the exchange.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.


Mixed trading for JSE Main Market

On the penultimate trading day of July, market activity ended with mixed on Thursday, just one stock separating stocks rising and declining after an exchange of 18 percent fewer shares, with 41 percent higher value than on Wednesday at the close of the Jamaica Stock Exchange Main Market.
The All Jamaican Composite Index added just 48.11 points to end at 460,076.56, the JSE Main Index shed 405.69 points to finish at 420,886.99 and the JSE Financial Index slipped 0.23 points to 103.72.
Similar to Wednesday, 49 securities traded, with 20 rising, 19 declining and 10 remaining unchanged. The PE Ratio, a measure that determines appropriate stock values, averages 16.5 based on ICInsider.com’s forecast of 2021-22 earnings.
A total of 11,830,600 shares traded for $136,776,530 versus 14,440,911 units at $97,082,889 on Wednesday. Transjamaican Highway led trading with 38.8 percent after 4.59 million shares changed hands, followed by Radio Jamaica 13.2 percent, with 1.56 million units and QWI Investments 9.1 percent after an exchange of 1.08 million units.
Trading averaged 241,441 units at $2,791,358, compared to 294,712 shares at $1,981,283 on Wednesday. Trading month to date averages 321,606 units at $15,666,712, in contrast to 325,554 units at $16,300,774 on Wednesday. June ended with an average of 249,610 units at $3,877,606.
Investor’s Choice bid-offer indicator reading has nine stocks ending with bids higher than their last selling prices and two with lower offers.
At the close, Barita Investments rose $1.20 to end at $84.70 after exchanging 8,897 shares, Eppley popped $5.77 to $41.87 in trading 1,017 stocks, GraceKennedy lost 30 cents to finish at $99.70 in switching ownership of 117,507 stock units, Guardian Holdings shed $9 to $640 with the swapping of 3,932 units. Jamaica Broilers popped 49 cents to $36.49 in exchanging 6,875 shares, Jamaica Producers rallied $1.50 to $23.50 after transferring 1,500 units, Jamaica Stock Exchange rose 53 cents to $17.83 in trading 3,054 stocks. JMMB Group fell 48 cents to $37.40 with a transfer of 252,605 stock units, Kingston Properties gained 36 cents to end at $9.90 in switching ownership of 5,437 units. Mayberry Investments fell 20 cents to $5.70 in exchanging 11,932 stocks, NCB Financial declined $3 to $139 after 23,985 shares cleared the market. Palace Amusement popped $30 to close at $1,050 in switching ownership of 75 units, Pulse Investments lost 25 cents in closing at $3.76 with the swapping of 414,730 shares, Sagicor Group declined $1 to $55 with 57,606 stock units crossing the market, Scotia Group spiked 50 cents to $41.50 with 446 units clearing the market and Supreme Ventures shed 50 cents at $20 in switching ownership of 10,621 stocks.
In the preference segment, JMMB Group 7% rose 24 cents to $1.84 in trading 541 units.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.

JSE US Market crawls back on Thursday

Trading on the USD market closed on Thursday with an exchange of 59 percent fewer shares at 94 percent less value than on Wednesday, resulting in an even number of stocks rising and falling.
Trading ended with five securities changing hands, up from four on Wednesday, with the prices of two rising,  two declining and one remaining unchanged. The JSE USD Equity Index added 1.24 points to end at 186.73.
The PE Ratio, a measure that computes appropriate values of stocks, averaged 11.6 based on ICInsider.com’s forecast of 2021-22 earnings.
Overall, 340,689 shares traded for US$8,870, down from 826,816 units at US$151,135 on Wednesday.
Trading averaged 68,138 units at US$1,774, compared to 206,704 shares at US$37,784 on Wednesday. For the month to date trading averages 182,914 units for at US$18,161 in contrast to 188,277 units at US$18,927 on Wednesday. June ended with an average of 87,444 units for US$6,162.
Investor’s Choice bid-offer indicator shows one stock ending, with the bid higher than the last selling price and three, with lower offers.
At the close, First Rock Capital dropped 0.6 of a cent to end at 7.2 US cents with an exchange of 26,683 shares, Proven Investments rose 2.47 cents to 25.48 US cents with 8,293 stocks traded, Sygnus Credit Investments lost 1 cent to end at 12 US cents with a transfer of 20,463 units and Transjamaican Highway ended at 0.75 US cents with 285,000 stock units crossing the exchange.
In the preference segment, JMMB Group 6% gained 6 US cents to US$1.09 with 250 shares changing hands.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.

GraceKennedy blast profits higher

GraceKennedy earned a 12 percent rise in revenue to $63.4 billion, up from $54.4 billion in the 2020 corresponding period. Revenues for the June quarter rose 15.8 percent from $26.6 billion to $30.8 billion.
Profit before tax for the half year was up 20.4 percent to $5.4 billion, reflecting an improvement over the $2.5 billion in 2020 and climbed 15.6 percent to $2.9 billion for the quarter from $2.5 billion in 2020.
Profit after tax attributable to stockholders for the half year bolted 30.6 percent to $3.6 billion from $2.75 billion over 2020 and rose 35 percent from $1.42 billion to $1.9 billion in the June quarter. Earnings per share for the period was $3.62, compared to $2.77 in 2020, while the second quarter recorded earnings of $1.94, up from $1.44 in 2020. In its report on the six-month performance, the company stated, “GK’s Jamaican food distribution business (GK Foods – Domestic) performed well in the first six months of 2021, recording an increase in PBT and revenue over the prior year. GK’s Manufacturing Division recorded strong gains in the first half of 2021, with growth in revenue and PBT compared to the first half of 2020. This performance was primarily driven by significant demand in the Jamaican and international markets for our Jamaican manufactured products, including Tastee Cheese, Tropical Rhythms, canned vegetables, frankfurters and vienna sausages. GK’s International Foods business exceeded both its revenue and PBT half year targets, with all business units surpassing PBT over the prior year. GraceKennedy Financial Group reported strong growth in both revenue and pre-tax profit for the first half of 2021. GK’s Insurance segment also continues to yield positive results, with GK General Insurance recording double digit growth in revenues in the second quarter compared to the same period in 2020. GraceKennedy Money Services exceeded its revenue and pre-tax profits when compared with the corresponding period of 2020.”
The shares that are listed on the Jamaica Stock Exchange, traded with a 30 cents loss on Thursday ahead of the results to end at $99.70 but is up 55 percent for the year to date.

Low trading for Trinidad stocks

Declining stocks outpaced those rising almost two one at the close of market activity on Thursday, with an 11 percent rise in the volume of shares trading over Wednesday activities, even as the level of trading remains subdued, resulting in mixed fortune for the Trinidad and Tobago Stock Exchange.
At the close, 15 securities traded compared to 16 on Wednesday, with four rising, seven declining and four remaining unchanged. The Composite Index shed 2.07 points to 1,420.62, the All T&T Index rose 2.01 points to 1,930.04, and the Cross-Listed Index shed 0.90 points to settle at 122.69.
Overall, 38,309 shares traded for $772,201 up from 34,566 units at $716,969 on Wednesday.
An average of 2,554 units traded at $51,480 compared to 2,160 at $45,070 on Wednesday. For the month to date, the average shares traded amounts to 21,495 units at $219,555 versus 22,338 units at $227,036. The average trade for June ended at 45,770 units at $724,497.
The Investor’s Choice bid-offer indicator shows eight stocks ended with bids higher than their last selling prices and two with lower offers.
At the close, Ansa McAl declined 50 cents to $57.50 in exchanging 2,646 stocks, Calypso Macro Investment Fund fell 28 cents to $16.22 after exchanging 200 units, Clico Investment Fund climbed 50 cents to $27.50, with 4,244 stock units changing hands. First Citizens Bank dipped 30 cents to $50 after trading 71 stocks, GraceKennedy closed at $6.15 in switching ownership of 962 shares. Guardian Holdings spiked 75 cents to $33.75 in swapping  6,267 units, JMMB Group slipped 8 cents to $2.02 while exchanging 15,982 shares, Massy Holdings shed 40 cents to end at $80.10, with 1,583 units changing hands. NCB Financial Group dropped 4 cents to $8.15 in an exchange of 230 shares, Prestige Holdings remained at $7.50, with 1,550 stocks crossing the exchange, Republic Financial Holdings advanced 4 cents to $135.55, trading 73 stock units. Scotiabank rose 45 cents to $59, with 232 units clearing the market, Trinidad & Tobago NGL shed 3 cents to $17.52 in switching ownership of 3,000 shares, Unilever Caribbean closed at $16.33 with the swapping of 500 units and West Indian Tobacco traded 769 stock units at $32.49.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.