Month: February 2018

Sagicor Group Jamaica recently closed a deal with Playa Hotels and Resorts which will see Sagicor giving up all their inclusive resorts and lands that can be developed to the company. This includes Hilton Rose Hall, Jewels Dunn’s River Resort, and Jewels Paradise Cove, Jewels Runaway Bay and the hotel tower and spa of Jewels Grande.

For this, The company would receive US$100 million in cash and a 15 per cent share in the company as they would have rights to 20 million Playa shares. Sagicor would now be the second largest shareholder in Playa Hotels. The company will also be represented on the Board of Directors in the group.

Sagicor is optimistic that this deal will bring about an expansion in the hotel industry whilst also creating employment for Jamaicans as it positively impacts Tourism. Additionally, they are looking to benefit from the resort markets in other countries where Playa owns hotels; such as Dominican Republic and Mexico.

Playa Hotels and Resorts trades on the NASDAQ, which is the second largest stock exchange market in the United States behind the New York Stock Exchange. The company currently owns and operates 15 all-inclusive resorts in Mexico, the Dominican Republic and Jamaica. Playa Hotels is the owner of Hyatt Zilara and Hyatt Ziva in Jamaica.

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After facing a $39.7 million loss in 2017 from its toilet paper business, AMG Packaging and Paper Limited has decided to discontinue tissue production and use 2018 to focus on its box business. This it says should help the business to grow by 2019.

The underperformance of the toilet paper segment significantly affected the bottom line of the company due to slow sales. Initially, AMG Packaging‘s hope was to capture at least 10 percent of the tissue market in Jamaica as the country has a high tissue import bill annually. However, several factors affected that plan and the company struggled to achieve their target share of the market. After investing in a tissue factory in Downtown, Kingston in 2015, a fire destroyed the distributor’s warehouse thus thwarting sales and pushing AMG Packaging a few steps back.

Even though AMG diversified their tissue product line, from manufacturing the brand Tishoo to adding specialty options plush and cottony, the company still struggled to achieve their financial goals with lower sales as consumers supported the competition both local and international.

Nevertheless, AMG is looking to improve its market performance with the expansion of its box business. When asked where capital would be sourced from as the company is currently working through financial challenges, AMG responded by stating their intention to seek funds from shareholders. They hope to reenter the market but currently did not state if they would be doing this using bonds or rights issue.

We do not recommend for investors to purchase shares in AMG Packaging at this moment. We expect to see improvements over the next few months as the company recovers from this challenging period.The stock currently trades at $2.05.

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National Association of Securities Dealers Automated Quotations Exchange (NASDAQ: NDAQ) is one of the leading providers of trading, clearing, exchange technology, listing, information and public company, services across all continents. Nasdaq is contending for the flotation of the international listing of the world’s biggest Initial Public Offering IPO from a Saudi Arabian oil producer, Saudi Aramco in the second half of 2018.

Chief Executive Officer (CEO) Adena Friedman did not explicitly state, but alluded to their interest on Monday at the World Government Summit in Dubai when she stated “Companies want to be part of the future, they don’t necessarily want to be part of the past… We are extremely proud of all the companies that choose to come to Nasdaq, but we don’t comment on any specific issuer.”

Saudi Aramco is a state-owned oil company of the kingdom of Saudi Arabia, a fully integrated global petroleum and chemicals enterprise. Saudi Aramco’s oil and gas production infrastructure leads the industry in the scale of production, operational reliability and technical advances. Furthermore, the company is the world’s largest crude oil exporter, producing roughly one in every eight barrels of the world’s oil supply. The company aims to raise USD 100 billion from its planned IPO.

Aramco President and CEO, Amin Nasser, in an interview with Consumer News and Business Channel CNBC, said “It’s about evaluating all the information that is being passed to the government in terms of different markets that we have in terms of listed venues, whether it is in the U.K., or New York or Hong Kong or other markets,”.

According to Nasser, the New York Stock Exchange (NYSE) is at the top list of the Saudi Crown Prince Mohammed bin Salman, as it offers certain amenities such as international recognition, prestige and a much bigger pool of investors. Moreover, other options include listing the company on Saudi Arabian’s Tadawul Stock Exchange which has an affiliation with Nasdaq.

Possibly having the biggest IPO ever and being the largest oil/energy company, Saudi Aramco, if listed on NASDAQ, will turn heads around the world. With that being said, oil is a very volatile commodity, so despite very good credentials, this company should be watched very closely.

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Being listed on the market for just over a month, Wisynco has already impressed investors with their first release of financial results.

These results presented were not only better than the same period in 2016, and not generated from normal operations but were also generated through weather conditions that impacted direct consumers.

The company reported net profit of $1.22 billion for the six months ended December 2017 or $0.34 cents per share. This is not only commendable, providing this was before listing, and their consumers’ businesses were significantly impacted by the rains, but it shows the quality of the company itself, showing that nothing can stop the company from growing.

For the three months ended December 2017, Net Profit rose to $578 million from $470 million in December 31, 2016, a 23 percent increase and earnings per share rose from $0.13 cents to $0.16 cents. Revenue generated by the company slightly exceeded $12.2 billion, with the last quarter creating the majority, with little over $6 billion. This shows an increase of $1.66 million or 15.7 percent for the six months, quarter over quarter.

Two months before listing, Wisynco got approval from the tax authorities for the transfer of three non-core operations to its parent. These operations include Wisynco Foods limited, Seville Development Limited and Fusion Limited, valued at about $1 billion after tax, which now falls under the Wisynco Group (Caribbean) Limited.

According to Mr. Mahfood, capital is being spent on recovery from the fire in 2016, which should be finished by the end of its financial year in June 2018. As such, the company will focus on controlling their cash.

The 2 billion dollar project involving the construction of cold-storage facilities, which is a part of the recovery, was also delayed due to inclement weather during summer but hopes to be finalised in the upcoming fourth quarter.

The company’s fixed assets have grown by $1.37 million or 37 percent  to $5.09 billion from $3.72 billion even through the recovery process. They listed on the market at $7.87 and is currently trading at $10.70, with an all-time high of just short of $14.00, which shows positive investor relations.

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Quantity producing is a strategy that Apple [NASDAQ: AAPL] is known for; they provide their client base with continuous updates year-over-year. But are these specific deadlines causing an uproar?

Quantity producing is not turning out so well for them.

There have been recent complaints about glitches and bugs in their software which, according to longtime customers, never used to happen when their customer base was smaller. They had feature-packed upgrades, some things rushed and some cut, causing delays in the release or inefficient updates. Apple is now putting in place a strategy to correct this, realising that they have been rushing and not meeting their deadlines.

These strategies that the company plans to implement will allow for engineers to have more time to work on features and refinements, than focusing on meeting annual requirements that seem to be rushed allowing for bug prone devices.

According to Bloomberg, the process is a huge cultural shock for engineers. They are used to quick turn-around with updates that keep loyal customers interested, which also shines the light on competitors to make them seem like they do not move as quickly.

What is coming next?

A single third-party app will be able to work on iPhones, Mac computers and iPods, the use of Apple’s iPhone apps on Mac and new characters for their popular Animojis, which will also be featured in the iPad. They also plan to integrate FaceTime and Animojis, allowing persons to use virtual faces, as well as potential FaceTime conferencing.

The first test will be their new software upgrade named ‘Peace’ which will most likely be called iOS 12.

In light of this, Apple has shifted its focus from quantity to quality produce. This is vital for customer satisfaction and company reputation. As such, despite loyalty to the company, some consumers have opted to switch from iPhone to Android, for ease of use and fewer issues, however, this will change their minds causing them to hold and see what Apple has in store for them.

Now that they are focusing on quality, are you excited to see what Apple Inc. has up their sleeves?

We shall see for the rest of 2018!

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In early February, the stock price of GrubHub increased by an impressive 29 percent to US$89.04 per share after the company announced a US$200 million partnership with Yum! Brands and better than expected fourth quarter results.Yum! Brands is the parent company for Pizza Hut, KFC and Taco Bell and is the fourth- largest private employer in the United States.

Based on the agreement, GrubHub will be expanding its services to offer pickups and delivery services to customers at their doorsteps. GrubHub will also be working with Franchisees to implement ordering online and pickup services from Yum Brand subsidiaries. The multi million-dollar agreement also sees the appointment of Pizza Hut’s President, Arthur Starrs, to GrubHub’s Board of Directors for a period of three years .

You may be wondering what would make GrubHub stand out from other competing delivery business. GrubHub is expanding their coverage of delivery to include additional cities to the 900 it currently serves. GrubHub increased its restaurant count in two years; from 40,000 to 80,000 and is available in 1300 cities at the moment and looks to provide their service to a majority of all KFC and Taco Bell locations across the US in 2018.

GrubHub reported fourth quarter earnings of US$0.36 cents per share and a revenue of US$205.1 million. On the other hand, Yum! Brands stock price decreased by 4.7 percent following the announcement but their fourth quarter review was nonetheless better than expected.

Earnings per share for the quarter increased by 53 percent to US$1.26 and net income rose to US$436 million from US$303 million the previous quarter. Regrettably, total revenue for the year fell by 16.4 percent to US$1.58 billion.

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For the first time in Twitter’s history the company has reported a net profit which caused the stock price to rise more than 15 percent on Thursday, currently at US$30.18. With this improvement analysts are even suggesting that Twitter may well be targeted as an acquisition.

For the fourth quarter, Twitter reported a modest revenue increase to US$731.6 million. Compared to a loss of US$167 million it experienced for the same period in 2016, the company is improving. Twitter currently generates revenue through video ad sales.

Earnings were US$0.19 cents per share, an increase from the US$0.14 cents that analysts predicted. Daily active users (DAU) increased by 12 percent,  EBITDA margins improved significantly from US$215 million in the previous year, which accounted for nearly a third of revenue, compared to US$308 million for 2017, which represented 42 percent of revenue.

Twitter blamed its lack of ability to increase its users on the fact that it had to rid the social media page of fake accounts, seasonality and purging the social media site from conspiracy theorists and white supremacists.

Twitter still has a long way to go if it wants to compete with social media giants like Facebook and Instagram. However, with its improvement in revenue and net profit, the company has positioned itself for greater things in 2018. For us though, Twitter is not a screaming buy.

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After a strong fourth quarter earnings report on Tuesday, shares of Snap Inc. (NYSE: SNAP) soared to US$20.61 from US$14.05 in two days, a 46.7 percent increase.

An impressive increase on paper but still a modest improvement as the stock has been trading below its IPO price of US$17.00 since July 2017.

Congratulations to Snap for increasing revenue and its user base for 2017 for the first time in history. The most positive news from the report is that the company is now making enough money to cover their necessary expenses.

Even though that is still not enough, Snap performed better than predicted. Analysts were predicting that the company’s revenue would amount to US$252.8 million but actual revenue for the fourth quarter is US$285.7 million. Additionally, the app now has 187 million active users.

Snap, however, had a net loss of US$350 million and an operating cash flow of a negative US$735 million for the entire year.  While boasting a gross margin of 33 percent is nothing spectacular when compared to other social media giants such as Facebook, which has an 88 percent gross margin for its fourth quarter and Twitter which had a 64 percent gross margin for their third-quarter reports, Snap is rather proud of its improvement and its prospects for 2018.

Snap’s costly expenses can be traced back to the company’s lack of ability in building its computer network to run its app. Instead, the company outsources the computer power from Google and Amazon Cloud. This outsourcing takes up 70 percent of Snaps expenses to run its app.

Snap generates revenue solely from ad sales. However, with competition from Facebook, Instagram and Twitter, Snap still struggles to increase its revenue to a point where its sustainable enough to compete. Moreover, it is somewhat tricky for Snap to expand its reach to many users as it is said that the app functions better with the more expensive and up to date smartphones in areas where the mobile internet speed is fast.

While we do not recommend investors to buy Snap Inc, it doesn’t hurt to be updated on the progress the company makes and hopefully that can continue as 2018 progresses.

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Amazon (NASDAQ: AMZN) is launching a delivery service whereby products are more readily available for faster delivery directly from sellers to customers. Sellers are said to be more inclined to use this service compared to others as Amazon sweetened the deal with low delivery costs, better logistics software and regular warehouse inspections.

This poses a challenge for competitors such as United Parcel Service Inc. (NYSE: UPS), and FedEx Corporation (NYSE: FDX), which provide similar service. However, Amazon still plans to use these delivery services as having different delivery options is better than relying on one, but Amazon will now get to decide how packages are sent rather than having the customer decide.

Initially, Amazon had announced that the delivery service was just a trial in October last year, but the company has realised that delivering packages on its own rather than depending on a third party is a more viable option and so far has seen the positive impacts it has had. Amazon will now be able to monitor deliveries right up until customers collect them. The company will also be able to save money through volume discounts, and since the delivery will be done directly from the seller’s warehouse to the customer, Amazon will no longer have to provide storage for the packages.

Amazon’s delivery service will also be beneficial to sellers as well. Amazon’s latest service, Fulfillment by Amazon (FBA), launched in 2006, allows sellers to ship their goods to Amazon warehouses for the company to process shipping when they come in. However, these sellers will be able to save money as they would not have to be paying Amazon the exorbitant storage and packing fees.

The company is finding innovative ways to increase and improve its service as they continue to expand their operation. Despite having a setback in its market price before releasing its earnings report, they are still one of the top tech stock on the market and we continue to recommend this stock to investors.

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