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Analysts back ice cream, cars and dolphins among their top picks for the week


Friday, September 29, 2017

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Trying to find equity analysts to agree on which stock to buy is a task. Sagicor Investments (SI), Mayberry Investments Ltd (MIL) and JN Fund Managers (JNFM) each disagree on which stocks investors should focus on.

JNFM's research department led by Ramon Small Ferguson has two picks this week: auto seller Jetcon Corporation Ltd, and ice cream manufacturer Caribbean Cream Ltd. Over at SI, the top four recommended stocks are National Commercial Bank (NCBFM), Jamaican Teas, Kingston Wharves, and Carreras.

In fact, it is noted that JNFM has NCBFM off their recommended buy list, while SI promotes NCBFM as a buy due to “robust growth in deposits and loans despite the competitive environment”.

Same thing with Jamaica Broilers Group (JBG). JNFM has JBG as a hold, meaning if you already have bought, don't sell, just hold. However, SI advises clients: “Jamaica Broilers Group's (JBG) current market price does not reflect the earning potential of the business. The US operation has been growing and should continue to provide modest growth over the medium term. This is in addition to the local poultry and agricultural raw material business which is expected to continue to perform. Coupled with the cost containment strategies which are aimed at improving efficiencies, the 12-month price target is closer to $22.00. This suggests that at current levels, the stock could provide returns of over 35 per cent.”

That said, MIL only has one recommended stock, which is Dolphin Cove. This recommendation is based on a six per cent jump in profits, along with other financial gains in US dollars by the tourism attraction firm.

Now each investor has to make their own determination based on personal factors. However, it is noted that many investors who have lost the secured returns from repurchase agreements have turned to stocks as a way to get cash from investment.

Small Ferguson cautions: “We think the typical repo investor's primary investment objectives are principal preservation and income. Consequently the potential volatility presented by stocks would likely not align well with the objectives of these investors. The other issue relates to the fact that the recent bull market has made dividend yields on most stocks much less attractive.”

In other words, as the Jamaica Stock Exchange does well, investors have to chart their path clearly in order to enjoy good returns.




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