Lumber Depot Limited, the newly incorporated company that previously operated as a segment of Blue Power (Jamaica) Limited will list on the Junior Market of the Jamaica Stock Exchange tomorrow (December 13, 2019). The company which was registered in October of 2019 issued a prospectus to raise just over J$ 169 million from the issue of 141, 247, 500 shares at a subscription price of J$ 1.20 per share.
With only 70 million shares offered to the general public; and investors only getting the first 2000 shares applied for in the IPO, expectations are that the stock will trade up to the maximum price permitted by the JSE’s circuit breaker rule. Caribbean Value Investor anticipates even higher demand for the Lumber Depot shares than for MailPac Group Limited.
Lumber Depot could trade up by 30%
Based on the Jamaica Stock Exchange’s circuit breaker rule, Lumber Depot stock can trade up to 15% of its IPO price before the stock is halted. The stock can then trade up by another 15%. The circuit breaker limits the rise or fall of any stock to a maximum of 30% within a given day. This means that the Lumber Depot stock could trade as high as J$ 1.38 before first being halted. The stock could close as high J$1.56 tomorrow.
Other Market Insights from CVI
WISYNCO could be fairly value at the current trading price of J$24.00 per share. Expectations are for full year earrings to be between J$1.18 and J$1.25 per share. The current share price that puts WISYNCO at a forward PE of 19.2X compared to the market average of 22X. Recent initiatives will support continued growth in earnings over the next 18-24 months.
Indies is expected to report earnings within the next few days. Interest is already been shown in the stock which has traded relatively flat around $3.00 per share since they last announced earnings for the period ended July. Additionally, both BIDs and ASK prices for the stock have been increasing over the past few days. Indies Pharma has one of the lowest debt to equity ratios and is fairly capitalized. The company reported a 40+% increase in revenues and a 16% increase in pretax profits in their last earnings report.
Market Insights compiled by Caribbean Value Investor.
*This information is not meant to be taken as investment advice.
*The Author of this article has beneficial holdings in INDIES PHARMA and WISYNCO.