Fesco jumps ICTOP10 with 33% gains

Future Energy Source commenced trading on the Junior Market on Friday and closed with a 33 percent gain from the 80 cents public offer price offer to close at $1.06. Its performance saw it slipping from the ICTOP10 list but with room for more growth based on expected 2021/2 earnings.
Future Energy Source was replaced by Main Event, with the latter falling from $4.74 last week to $4.05 this week. The Main Market TOP 10 saw no change to companies on the list. The bullish tone of the Junior Market was joined by the Main Market this past week, with the latter now breaking out of a narrow channel it was trading in for some time, as this publication suggested would happen soon.
The markets made more gains in the past week, with the Main Market recording its ninth day of unbroken gains on Friday, but technical signals suggest a continuation of the rally.
Watch these stocks over the next few weeks, Barita Investments, Caribbean Cement, Grace Kennedy, Jamaica Producers, NCB Financial, PanJam Investment and Sagior Group.
The top three stocks in the Junior Market are headed by Elite Diagnostic, followed by Medical Disposables and Jetcon Corporation, with the potential to gain between 285 to 300 percent. The top three Main Market stocks are Radio Jamaica in the number one spot, followed by PanJam Investment and VM Investments, with expected gains of 174 to 388 percent.
Added to the technical indicators is a limited supply of shares for some companies. One such is Caribbean Cream that currently has few offers on the board. The same goes for Elite Diagnostic, Stationery and Office Supplies, Lasco Financial, Main Event, ISP Financial, Cargo Handlers. In the Main Market, its Berger Paints, Jamaica Producers and Radio Jamaica.
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 12.9 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 32 percent rise in the market that would equate to a rise of 50 percent to March 2022. The Junior Market Top 10 stocks average a mere 5.8 at just 45 percent of the market average, indicating substantial gains ahead. The JSE Main Market ended the week with an overall PE of 16, some distance from the 19 the market ended March at, suggesting a 19 percent rise from now to March 2022. The Main Market TOP 10 trades at a PE of 7.5 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 247 percent and 178 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.