Major shakeup in Junior Market ICTOP10

The Junior Market had some major shakeup in some of the listings this past week as investors keep their eyes solidly on opportunities in this market, having slowly eating away at the above-average gains available in the market and driving prices of many stocks up and pushing the market back to early January 2020 level.
During the past week, Main Event surged nearly 33 percent from $3.50 to $4.65, pushing it from second spot last week to 10th this week. Medical Disposables dropped from the third position with a gain of 19 percent to $5.28, Stationery & Office rose from $5.71 to $6.45 and taking it from 5th to 7th position, while Lasco Financial moved up to 6th position from 9th last week, with no price change, Caribbean Producers moved up from 8th last week to 3rd this week and Caribbean Cream shifted from 7th to 2nd this week.
Stationery & Office, General Accident, Medical Disposables and Main Event that are at the edge on the Junior Market TOP10 could well drop out at any time as they are all bunched together with potential gains of 188 to 210 percent. In the Main Market, VM Investments, with potential gains of 128 percent and Berger Paints with 122 percent, could drop out soon. Results of companies to come shortly could result in changes in the list, depending on how investors respond to each.
The bullish tone of the two markets continues, with technical indicators and fundamentals of many companies keep on powering prices higher with many investors looking to the future with the recovery of the economy in mind and the impact that it will have on stocks.
Investors should expect a host of company results to hit the market next week as the mid-month date approaches. Watch these stocks over the next few weeks, Grace Kennedy, Jamaica Producers, PanJam Investment, Sagior Group, MailPac, Access Financial, Lasco Financial, Lasco Distributors, Caribbean Cream, ISP Financial.
The top three stocks in the Junior Market are headed by Elite Diagnostic, followed by Caribbean Cream and Caribbean Producers, with the potential to gain between 242 to 282 percent. The top three Main Market stocks are Radio Jamaica in the number one spot, followed by PanJam Investment and Jamaica Broilers, with expected gains of 166 to 413 percent.
The targeted PE ratio for the market averages 20 based on profits of companies reporting full year’s results, up to the second quarter of 2022. Fiscal 2020-21 ended March 2021 with the average PE at 17 for Junior Stocks and 19 times for the Main Market. With interest rates on government paper below 5 percent and likely to remain there for a few years, the likelihood is for the average PE ratios to climb higher during the next twelve months.
The Junior Market, with an average PE 12.2 based on ICInsider.com’s 2021-22 earnings, is currently trading well below the target, as well as the recent historical average of 17. This represents another 40 percent rise in the market that would equate to a rise of 60 percent to March 2022. The Junior Market Top 10 stocks average a mere 6.1 at just 50 percent of the market average, indicating substantial gains ahead. The JSE Main Market ended the week with an overall PE of 16.5, some distance from the 19 the market ended March, suggesting a 15 percent rise from now to March 2022. The Main Market TOP 10 trades at a PE of 7.7 or 47 percent of the PE of that market and well off the potential of 20.
The average projected gain for the Junior Market IC TOP 10 stocks is 229 percent and 173 percent for the JSE Main Market, based on 2021-22 earnings. 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.

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