ItsMoneyMark Newsletter #7

It’s 7am on a Friday – which means it’s time for ItsMoneyMark Newsletter! 

The Dow Jones races past 30,000 points for the 1st time ever before a slight pullback. Bitcoin hits new all time high as well before a very large pullback. 

Ketchup and Corn Beef King

And even GraceKennedy is seeing someone serious life & legs in its stock price based on recent results. Go Ketchup and Corn Beef Baby! From seeing their marketing, social media, branding and all the positive changes, is Grace now on the move with determination? Don Wehby their Chief in Charge, has a totally different market presence now and the overall optics – it seems the Legacy Brand has awaken… On all Fronts. We have seen over the past 12-24 months the dramatic change and what this has done for Seprod and its share price eventually regarding branding, marketing, the addition of Pandohie as face of the Company and the market perception of Seprod. Of course, the earnings and fundamentals have to come and be delivered. GraceKennedy has delivered the Earnings play now, but the important point is we are starting to see a different side of Grace and a side that the Market, the Analysts and the Shareholders want to see. 

By the numbers, Grace’s Earnings per Share ( “EPS” ) of J$ 1.69/ share versus J$ 1.27/ share ; up 33% Year over Year. 

Depending on the Final Quarter, we could see Grace with normal EPS hit a year end of around J$ 6.25-J$ 6.45 share. 

Based on where GraceKennedy (“GK”) is trading now, a P/E – price to earnings under 10 times (10X)… hmmmm… with many analyst touts putting the JSE at 15-20X earnings, interesting times ahead for Grace if the fundamentals and Grace’s positive PR machinery continues. 

A nice real big deal with real earnings also could be the right recipe that Grace and its shareholders need for 2021.

As shareholders crave not just a pension stock anymore but a stock and Company that can Gobble up some market share. 

Dow 30,000

It really seems no matter what happens economically or politically – the markets just keep charging on:

(1) Low interest rates &
(2) Government stimulus programs in respective countries 

It’s really amazing to think that despite so many small to mid sized businesses shutting down (huge numbers), companies filing for U.S. bankruptcy protection, unemployment numbers rising, etc. the global benchmark or indices keep charging North! 

For years, market analysts have been saying “well the markets are overvalued, similar to historical comments on Tesla” (We are just drawing a similarity in the positive trend here) but there best returns have still been in the Equity Markets. 

Logically, with the some earnings down 30% – 60%, higher P/E ratios, and all the aforementioned negative macros, the indices have still trended higher. 

The reality is until there is a sharp climb in interest rates or a change here of significance in tone, don’t expect positive trends to change even at all time highs. 

The market analysts clearly view the depressed earnings as a one off given that stock prices haven’t been slammed to provide an opportunity and one will have to wait another quarter or two to see what happens here. 


Interestingly, the JSE is seeing a similar phenomenon. Earnings across the board are lower however prices are standing tall. We are not seeing the stimulus funds or the pumping into the Market of monies like the U.S. as yet, but this could always change. The similarity is are investors looking at this as a one off or is it that the shares in many of the depressed earnings stocks at so tightly held with floats not really at 20% but around 5-9% especially outside core owners and Top 10…

Overall, a few analysts have market P/E pegged at 15X to even as high as 20X, a wide range and quite rich for a number of companies given the earnings and outlook. 

Until next week, be good, keep moving and happy markets!

These opinions and thoughts are solely of ItsMoneyMark and does not constitute investment advice.
Ensure to always speak to a Licensed Financial Advisor.

Thank you for reading!

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