ItsMoneyMark Newsletter #20

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Supreme Ventures Ltd (JSE: SVL) continues to expand its horizons and more and more is functioning like our very own hedge fund in Jamaica. We like it!
 
It was hard to get by a Quarter, then a Month without an exciting corporate action item from the Company. Well, with SVL it now seems like weekly announcements are lit. SVL recently announced it has acquired a 10% ordinary equity stake in Main Event Entertainment Group, listed on the Jamaica Stock Exchange Junior Market (JSE: MEEG). The Company’s announcement highlights the synergies between the companies, and the market has been speculating about other possible benefits given the existing relationships between the firms, i.e., related parties in the roles of:
 
– Chairman of SVREL, Mr. Solomon Sharpe
– Executive Chairman, SVL, Mr. Gary Peart
– CEO, MEEG, Mr. Solomon Sharpe
 
Besides, the press release from SVL, that states the move and execution will allow them to better leverage their entertainment brand, we like that the deal reminds of us of the transaction somewhat between, Barstool Sports and Penn National Gaming, Inc. The main difference is that we would have liked to see SVL take a bigger stake in MEEG, preferably 20% or more, but perhaps that could be on the cards in the future and some board seats. Let us see.
 
Since, Barstool and Penn National did their deal (January 29, 2020), Penn National the gaming side, like SVL, is +171% and was at its all time high in March of this year.
 
Of course, while not exactly alike to the U.S. Market that has a faster uptake and uplift, if Main Event, can really pivot even more (digitally), rock its digital arm way more, perhaps launch an influencer arm (if its hasn’t already done so), and take digital to a whole new level = SVL piggy back on all of this – as Barstool and Penn National did and flooded the market – winner, winner chicken dinner all around here for both companies, SVL & MEEG.
 

  • As the new saying goes, SVLto the Moon as the company has a stronger EBITDA and EPS line currently.
  • MEEGhas fixed its cash burn over the past few quarters and seems to be still transitioning its business – overall this could be a way of guaranteeing some more potential business.

Market Moves:
It has been a hot week locally & overseas, with some ground-breaking news, and in some cases earth shattering, but should be “profitable” and price bumping for your portfolios:

  • Guardian Holdingshas re-listed on the Jamaica Stock Exchange (“JSE”) effective May 5th, 2021 with a bang! The market was a blaze with how much of a lower price to earnings (P/E) ratio Guardian was at in Jamaica (“JSE”) than Trinidad & Tobago (“TTSE”). Guardian in re-listing, became the 3rd largest market capitalization on the JSE in no time… the key now is for Guardian to maintain the recently announced profits and to keep these growing… Guardian’s reputation is back intact, its CEO’s Tewariremarks were well received in Jamaica and the JSE, they were humbling, direct, easy to understand and sincere. The NCB backing is powerful for Guardian and its minority shareholders moving forward.
  • Just as big as Guardian Holdings re-listing was, the announcement of Ms. Joanna Banks as the incoming CEO for PanJam Investment Ltd in a few months. The effective date will be July 1, 2021 for the hot seat. It is a bold move by PanJam Investment and one that has already been positively received by media houses and social media. It is more colossal then has been covered to date, but we assume that close to July 1, 2021, more coverage will occur. We think there could be some similarities between the “Pandohie Effect” at Seprod and the “Banks Effect” at PanJam.
    • The “Banks Effect” is to come but let us draw a line between both.
    • Pandohie re-invigorated Seprod over the past few years, in many facets and ways and still is. Some analysts now call the Seprod CEO, Mr. Jamaica. Pandohie, communicates actively, on Seprod, the nation, is active at associations, wears the brand, has made the brand out there, and of course increased the earnings organically and inorganically.
    • A small difference is that Seprod had an independent CEO before, while Banks is heading into this role as the 1stindependent to our knowledge after a family-based CEO, Facey.
    • Nonetheless, Banks re-invigorated Annual General Meetings (AGMs), and responded favourably to media, analysts over the years and we expect this continue. While this is not the only gauge in a profitable CEO, it is something the JSE market responds favourably to, and something Pandohie thrives on as well.
    • We expect PanJam, to be viewed differently now by the market and its minority shareholder base should expand. It will take time as did Seprod over the past few years to get legs (was stuck at J$ 15/ share for some time).
    • Another good thing is PanJam is coming off one of its worst years, Banks is coming in at a good time to take over the reins from an earnings per share (“EPS”) standpoint, like Pandhoie’s entry point at Seprod.
    • You do not want to get in at the peaks, jump in at the valleys.
    • PanJam is worth a serious look again, and we hope to see banks join the top 10 shareholder list at PanJam in the short to medium term.
  • Eppley Caribbean Property Fund buys another two (2) properties in Trinidad & Tobago. This deal once closed now puts this Eppley, at 16 properties and over 775,000 sq. ft. of property.
    • It seems clear, it is just a matter of time and a number until Eppley Caribbean Property hits the milestone of 1 Million sq. ft.
  • The big 5 tech stocks as they are now called all crushed earnings and seem to not skip a beat, regardless of the economy. As we have said before and keep saying in, ItsMoney, do not bet against any of them, until they disappoint for a Quarter, which has not been in the longest time now. We cannot even remember!
    • Microsoft, Apple, Amazon, Facebook, and Google – crushing the markets and their quarterly earnings reports.
    • Making US$ on CDs or the 10-year Treasury feeling unimportant for investors seeing these numbers.


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These opinions and thoughts are solely of ItsMoneyMark and does not constitute investment advice.
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