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Chartered Accountant - Jamaica Stock Exchange...Mar 09, 2015 · Best investment option for 2017 ....
Transcript of Chartered Accountant - Jamaica Stock Exchange...Mar 09, 2015 · Best investment option for 2017 ....
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Best investment option for 2017
By John Jackson
Chartered Accountant
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• Investors have many choices to invest in Jamaica
• Many took the route of
Money market a) Local J$
b) US$
Stocks
Unit Trust
Real estate
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The winner
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• Investors gladly invest in RE & US$
They think they can’t loose
• Select JSE stocks out perform both by miles
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Just a gentle reminder Profit drives stocks & dividends too
But interest rates critical
FX market
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What did many miss
Gains since 2014 lows to peak
• Main market up 180%
• Juniors up 353%
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In 2015 a total of 26 doubled or more than
doubled
In 2016 11 stocks more than doubled
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Investing for your future Investments
tools
Technical analysis – past market movements
Fundamental analysis – financials & environment
Combine both for best performance
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Best investment option for 2017 Tomorrow
By John Jackson
Chartered Accountant
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Stock market short term performance
Min market up 26% in 2016 JM 45%
2017 AJI 0.5% JM 7%
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What is ahead?
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Graph of market index
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280,000 points on main market
AJ index
33% from Jan 23.
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Graph of market index
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3,200 points for junior market index
15% away from Friday Jan 23
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Price at EPS Current
Company 24/1/2017 2017 PE
ISP 9.00 2.00 4.50 MEDDS 4.90 1.00 4.90 tTECH 6.50 1.20 5.42 LASM 5.20 0.90 5.78 AFS 25.30 4.35 5.82 KEY 3.00 0.50 6.00 MAIN 2.00 0.33 6.00 LASFN 3.65 0.55 6.64 JETCON 10.00 1.50 6.67 DCL 14.00 2.00 7.00
TOP 10 for 2017
Junior market
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Price at EPS Current
Company 24/1/2017 2017 PE
BIL 5.75 2.50 2.30 C&W 1.35 0.38 3.55 RJR 1.40 0.35 4.00 CCC 32.00 8.00 4.00 JMMB 15.31 3.00 5.10 BERG 8.50 1.60 5.31 PULS 4.35 1.35 3.22 NCB 52.60 8.00 6.58 SCINVST 33.00 4.73 6.98 SGJL 36.00 4.50 8.00
TOP 10 for 2017
JSE Main market
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Investments tools
The markets are at a high now
Risk is greater than in 2014 early 2015 & most of 2016
But valuations, current economic trends, profits and interest rates suggest there are more gold in
those hills
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The end of presentation
Thank you
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Other things of
note
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• Growing profits = Dividends & Stock prices
• JSE sold at $1.50 late in 2014 – went to $40
Capital fully paid back in 1 year
• Dividend paid from July to mid 2016 = $1.57
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What did $100,000 investment do?
AFS in 2010 now $1m - best performer by far to 2015
CCC end of 2014 $1.5m to 2017
Kremi in 2014 low $1.17m
HonBun from 2014 low = $1.29m
JSE end of 2014 now $1.5m
Pulse $922,000
Paramount $1.87m to peak
CHL $1.68m to peak
All but Pulse was IC Insider.com BUY RATED
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• Jamaicans need to switch priorities to be well off
at an early age
• Investors prioritize buying their first house
• But they should instead be looking at buying
their first stock before the house
• Why? A number of reasons
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• Stocks grow faster
• Use stock gains to buy house
• More liquid than real estate
• Can sell some shares
• Try selling part of house
• Stock investing creates meaningful 2nd business
• Allows for learning about investments
• Dividends grow over time
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Dividends are important
A number of dividend yields competitive with money
market rates
Capital appreciation is key
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Jamaican stocks have a long history of blow out
gains for some stocks eg.
Lascelles, Courts, Jamaica Flour Mills, Montego
Freeport
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Main market – steady growers
Junior Market – rapid growers
Need growth in profits
Lower or stable interest rates
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• All forms of investment require some amount
of knowhow be it RE, stocks, bonds etc.
• RE attractive due to the long holding periods
• For stocks we need gains tomorrow & everyday
• That is not how it works
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• The PE of money in 2014 was 11
• In 2005 PE=16
• The PE of JSE was 5 times 2014 EPS
• The PE of money is around 17
• PE JM 17 based on 2016 & 8 proj
• MM = 11 & 9.4
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Really profitable investing is not about
• Loving a stock or not
• Following the crowd
• Get info & act before the crowd descends
• Follow consistent revenue growth & profit
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Data suggest market at an early stage of a long term bull run
• See competitive FX rate driving local businesses
• Profits rising especially for JM stocks
• See interest rates falling
• See stability in economy with some growth
• Stocks should have another 3-4 years to run based on
history.
• Happy & profitable SM involvement
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• Good investments usually need time
• Nothing beats knowledge & Information
• It makes investors surefooted
• Invest based on good info not rumor
• Understanding interest rates relationship
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