ItsMoneyMark Newsletter #83

NCB Financial Group: Hits J$ 80.41, bounces back to J$ 85, Sweetheart Deal?

NCB Financial Group Limited (JSE: NCB FG) has two (2) important dates coming up. NCB FG has advised the JSE – Jamaica Stock Exchange, that they have their, Board of Directors meeting and their 4th quarter investors’ briefing, respectively, to hit the market on, November 10, 2022, and November 11, 2022. 

We are excited about this at ItsMoneyMark and so too is Mr. Market, as the last quarter that NCB FG put out what stellar, it was incredible, that was their 3rd quarter, and of course, analysts, brokerages, want to see if NCB FG, will continue this earnings momentum & growth. That is the key. 

Additionally, NCB FG, senior executives at the investor briefing should expect material queries around what is happening with NCB FG, such as, a dividend decision, or declaration, especially if one is not made at the Board meeting on November 10, 2022. NCB FG’s current share price, has been hovering in the low J$ 80s in recent trading days, making a new 52-week low of J$ 80 or so. Could it break through support at J$ 80 per share? It is possible, but J$ 80 seems to be a psychological support level for the share price of NCB FG

Despite the robust earnings in Q3, the stock has fallen out of favour with investors due to lack of ordinary dividends and/or guidance there, this seems to be the key for the November 11, 2022, meeting, and transparency or guidance around this for minority shareholders and NCB FG investor relations. 

Overall, J$ 80 per share, seems too good to be true, almost a case of “shut yuh eye and buy it, and put it down.

At ItsMoneyMark, our new audiocast addition of “Hot Take,” we recently covered Jamaica Broilers, and next up, this coming week, is, this said topic, it will be NCB FG, enjoy!

Market Moves:

  • U.S. Federal Reserve (“Fed”) did what most expected, another interest rate increase! 

Highest levels since 2008, with some market pundits calling for rates to now go as high as 10% or higher, double digits? Well, we are far away from there, but like everything, this is the new and sudden rhetoric in markets, given the trend of interest rates, and the continued sharp upward movement in rates. 

The Fed, earlier this week, on Wednesday, November 2, 2022, raised rates by 0.75%, or 75 basis points, with the new target range being 3.75% – 4.00%. 

  • Earnings Season brings “Dividend Season” with it. Not a sad thing at all, but a good thing. A lot of financial advisors, may tell you, to singularly focus on “growth stocks,” but dividends not only provide you with interim cash flow, that you can elect to re-investment in the said stocks, and buy more, but also, these dividends provide evidence the company is doing well, in most cases… For the company to pay dividends, then the retained earnings must be positive, and the profits should be good, for the respective Board of Directors to make this decision. 

While financial advisors may debate this from time to time, dividend plays, are a positive sign of a Company’s strength, and with a looming U.S. recession potentially on the way, dividend stocks, may well be higher in demand moving into 2023… 

On this note, coming up, Dividend considerations:

  • JFP Limited: Deferred to 1st Board Meeting of 2023
  • GraceKennedy: November 10, 2022
  • Eppley Limited: November 11, 2022
  • PanJam Limited: November 11, 2022
  • AMG Packaging: November 15, 2022
  • TransJamaican Highway Limited (JSE: TJH), fires on all cylinders for its 3rd Quarter. Big Money Time. TJH, and its shareholders needed this type of quarter… 

By the numbers, TJH registered 3rd quarter revenue of US$ 16.7 million versus US$ 13 million, year over year, for a healthy increase of 28.5%. Net profit was US$ 2.1 million, almost 4x, or quadrupling the number, in the previous year, of US$ 516k. For the year to date, or 9 months, TJH’s net profit now stands at US$ 4.1 million. 

To close the quarter, September 30, 2022, TJH’s total equity was, US$ 51.2 million, with total non-current liabilities of US$ 234.7 million. 

The company’s market cap is on or around J$ 17.8 billion. 

  • Dolla Financial Services Limited (JSE: DOLLA) has seen some big trades recently by Senior Managers & Directors, a good sign! As we say at ItsMoneyMark, nothing like some “skin in the game,” as it drives confidence in the market capitalization of a company, plus earnings of course. 

Dolla saw, approximately 3.42 million shares bought up by company insiders – Directors & Senior Managers, between October 28, 2022, to November 1, 2022. 

Dolla’s market cap, is just above J$ 8 billion, with its share price on or around J$ 3.30/ share (52-week high of J$ 3.83/ share)

  • Lasco Manufacturing Company Limited (JSE: LASM), is like that car that you never want to stop driving. This company, just keeps churning out the earnings, despite any pandemic, economic cycle, interest rates, inflation, whatever the measure, LASM, is a consistent winner with crushing those earnings numbers. 

By the numbers, LASM reported for its 2nd quarter, September 30, 2022, revenue of J$ 2.86 billion, versus J$ 2.33 billion, year over year. Revenue, jumped by 23%. 

LASM’s net profit for the quarter, was J$ 468.7 million, versus J$ 380.3 million. LASM’s earnings per share (EPS), increased to J$ 11 cents, surging by 22%. Important to note, LASM’s cash and short-term investments “war chest, or potential acquisition monies, expansion monies” hit approximately 2.86 billion to close the quarter. 

Of significance as well, is LASM’s net worth, shareholder’s equity closed the quarter, at just under     J$ 10 billion, with its current market cap at J$ 15.7 billion. Not a bad price to book valuation for a company growing earnings 20% +. 

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