ItsMoneyMark Newsletter #70

U.S. Equities Market, a Ton of Opportunities, Choices Galore 

52-Week Low Bonanza 

When any market nose dives, there are opportunities across the board. If you are not careful, take your time to digest the opportunities, be extremely selective, as it can easily become, like a “kid in a candy store, approach or attitude.” Which there is never any sense to that, in buying everything in the store, LOL. 

When you speak to a U.S. Analyst, or U.S. financial advisor, he/ she will say in these present markets, because the market is down across the board, there is so much one could buy, ranging, from, Disney, Snowflake, Goldman Sachs, Tesla, Microsoft, and the list or conversation would go on and on… Each conversation of course would be different. “Disney offers so much value at current price levels, this is unprecedented.” “Microsoft, likewise.” “Tesla, having pulled back 35% – 45% and based on their history is screaming.” And this could go on for hours, because overall, its an across the board drop for the Market.

Once you can wait, your risk profile suits this, and you speak to your financial advisor, there is immense value out there. Of course, if you can wait, we re-iterate. 

Being selective, we recently spoke about, Carnival Corp (US: CCL) and Royal Caribbean Cruises Ltd (US: RCL). RCL clearly seems to be the stronger play, and safer one long-term. We add American Airlines Group (US: AAL) and The Walt Disney Company (US: DIS) to the grouping. In these uncertain times, it’s not only about businesses that we are seeing value in at these levels, but also, companies that aren’t going to disappear. 

Market Moves:

  • BYD Motor, crushes their first 6 months of sales/ deliveries for energy vehicles (“EV”) to take the # 1 spot in the EV market from Tesla… Surprise, surprise, but hey, they are backed and strongly supported by Mr. Buffet, Berkshire Hathaway (US: BRK-B), so it really should not be that big of a surprise 😊. Buffet & Berkshire are calculated, quiet, and dedicated. They only ever make noise, when their SEC filings on purchases/ sales, get released, and the media carries reports on the stakes that they have purchased, or increased, example, in Occidental Petroleum (increased equity stake) recently. 

Over the past year, BYD Motor sales are + 315%, a phenomenal number, and the company got going in 2003, just 19 years ago. 

To take the # 1 spot currently, BYD Motor delivered 641,350 EVs as compared to over the same period, Tesla delivered 564,743 EVs. It brings about another rough patch in a series of rough patches for Tesla, as their founder, Muskie has been receiving negative public relations as of late, personal, and corporate. Tesla’s share price is currently around US$ 760, rebounded quite a bit from its 52-week low of US$ 620.57, but still, Tesla year-to-date is down, about 37%. 

  • The Chicken King, Jamaica Broilers Group (JSE: JBG) really knocked it out the park with this latest year, April 30, 2022, audited financial statements. Despite the economic conditions, supply chain issues, inflation, and much more, JBG’s earnings surged 35% year over year… Chicken being inelastic despite market conditions is an understatement. Wow! 

By the numbers, operating revenue improved to J$ 75.7 billion, increasing by 33% year over year. Net profit registered for the year-end 2022, eclipsed J$ 3 billion, hitting J$ 3.07 billion or earnings per share (“EPS”) of J$ 3.11. 

From a review of the segment breakout, the Jamaica segment really shined during the 2022 year-end versus the U.S. operations. Overall, both segments did well, but Jamaica, really outperformed, representing as much as approximately 60% of operating revenue and approximately 66% of profits for the period under review. It goes to show you, as we have seen with so many powerhouses, large Jamaican companies, which seek to diversify globally, the Jamaica growth rate is so good over the long-term and at times, that Jamaica continues to power the returns. 

  • First Rock Group has been on the move in 2022, with the extraordinarily successful Dolla Financial IPO and now, they have just announced another major prospective dealmaking announcement, via, “First Rock Real Estate Investments Limited”. 

The company states they are part of a consortium seeking to purchase the well-known Medical Associates Hospital. Their release makes it clear, that it is not just the going concern entity, which is the operating entity, but also the underlying real estate of Medical Associates Hospital. It is good to see that latter point included and clarified, as with the recent name change to include “Real Estate” in the name, then the market is expecting to see the focus placed on this asset class we assume at ItsMoneyMark

Overall, the announcement demonstrates how attractive, and how many private equity investors 

have powered up, to continue to enter the healthcare sector. First Rock now plans to enter the healthcare fold. 

  • There has been quite a few, or one may say a plethora of company re-organization announcements on the Jamaica Stock Exchange (“JSE”) recently… Things are heating up. In some perspectives, these re-organizations, may be driven by, the regulatory environment, the economic environment, to create further shareholder, or a mix of all these items. 

Barita Investments Limited (JSE: BIL) had gotten things going with the announcement of their financial holding company, and they gave further details of this at their phenomenally successful, and well attended Annual General Meeting (“AGM”), their 45th. They have been followed on, by First Rock Group, making announcements to the market, on changes to one of their Company names, not as much a re-organization. To add to the flurry, Proven Investments (JSE: PIL), just came out with an announcement with a significant group re-organization and names changes throughout the group, aligning subsidiary names to “PROVEN,” and just this week, came Mayberry as well, for soon to be welcomed, “Mayberry Group.” 

At ItsMoneyMark, we like this, its shows given the magnitude of announcements/ changes, plus they have all been happening simultaneously, that, we are going to assume it is more regulatory driven than just commercial driven, that it is a good thing. Over the long-term it should create the right mix of regulatory/ commercial environment for existing shareholders in these companies and others, and for future shareholders. Additionally, it demonstrates, our capital markets, ordinary shareholders, minority rights for structuring, markets in general are evolving in the right way, for minority shareholders and pensioners. Booyah! 

  • Sagicor Select Funds Limited (JSE: SELECTMD, SELECTF), we continue to express, per our weekly newsletters and our weekly ItsMoneyMark Earnings Report, could use a Face, even if they are passive listed companies, that mirror image indices on the JSE – Jamaica Stock Exchange. 

Sagicor Select Funds Limited just announced, a director resignation of Dr. Warren Chin effective July 5, 2022. It could be something, or just another corporate action item by Sagicor Select Funds, but overall, our thoughts are, regardless of if it is passive, Sagicor Select Funds needs well required attention. 

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