Category: Market News

Netflix (NYSE: NFLX) wants to incorporate a round icon on its mobile app that vaguely gives the customer a preview of movies or series on Netflix. This will be executed by the customer who taps the icon of those previews and then swipes through them to explore more.

Todd Yellin Vice President of Product said previews would be available “many hundreds of titles,” including both originals and licensed shows. According to NASDAQ Yellin also stated the 30-second previews would be a massive part of the Netflix catalogue.

These new previews were shared at Netflix’s two-day event, Lab Day’s, which is used by the company to showcase some of its technology. According to NASDAQ Yellin said that the company was looking at the further expansion into mobile innovations as it has proven to be an integral part of viewing for Netflix’s user base.

The company has made recent enhancements to its viewing capabilities such as the launch of mobile downloads as well as codec optimisation to enable higher-resolution viewing with as little as 200 kilobytes per second (kbps). This move was because of Netflix reporting a 20 percent viewing on mobile devices while half of Netflix members access the mobile services month over month.

Netflix (NFLX) has been leading the way for digital content since 1997. Netflix is the world’s leading internet entertainment service with over 117 million members in over 190 countries enjoying more than 140 million hours of TV shows and movies per day, including original series, documentaries and feature films. Members can watch as much as they want, on nearly any Internet-connected screen at anytime. Members can play, pause and resume watching, all without commercials or commitments.

Currently, the stock is being traded at $316.10, and analysts at SSL recommends a hold on this stock at the moment.

 

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GraceKennedy Limited [JSE: GK] released their audited financial statement for the year ended December 2017, passing the 90-billion-dollar mark for revenue.

The company itself had a challenging year. SSL recommended clients to sell their holdings in GraceKennedy as the stock was not maintaining is normal performance. It was noted that the stock was merely stagnant, not providing much growth or even income to investors, thus being a pointless cash and portfolio space holder. However, amidst their challenging year, some sectors stood strong; its Financial and Food sectors. The increase in revenue to JMD $92.47 billion was attributable to the growth, better marketing strategies and innovations in those sectors that kept their feet on the ground.

The company stood through hurricanes and a ban on one of their best-selling products, corned beef in Brazil but still managed to prove resilient.

The company saw a 4.8 percent increase in revenue over 2016 and reported a 5.2 percent increase in Net Profit to JMD 4.77 billion, even their assets grew by a little over JMD 3 million for the year.

The group’s CEO commended her team for staying focused and proactive through the difficult times, still achieving the company’s objectives like launching new products and discovering new ways of distribution.

GraceKennedy acquired Consumer Brands and is very pleased with how both companies have meshed. Consumer Brands has contributed to the overall increase in revenue and profit from just September of last year.

Every company has its difficult times; however, every company’s aim is to not allow such adversities to let them fall. Opportunities were maximized, and revenue and profit grew through one of their toughest times.

When a company produces good results, their investors will see those results in dividends. Their earnings per share increased by 33% to $0.40 in 2017.

With proposed investment in a new headquarters, the company also received tax credits of over JMD 400 million.

The stock closed at $44 per share yesterday and has been trading around this price for some time. Investors are encouraged to add this stock in their portfolios as capital preservation with the expectation that the brand of the company will help maintain its value.

 

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An asset, whether a gold nugget or a working farm, can and should be compared to others when making purchasing or investing decisions.

This is known as opportunity cost.

By putting money to work for you in the most rational, fulfilling way, you can enjoy success earlier in life and with less risk.

Asset Type #1: Those That Generate High Returns On Capital

These are the second best investment because you can earn significant returns on very little money. The downfall is that you have to pay out all of the profits as dividends or reinvest in lower returning assets because the core operation can’t be expanded through organic capital additions.

Asset Type #2:  Those That Appreciate Far Above the Rate of Inflation but Generate No Cash Flow

Think of a rare coin or excellent art collection.

If your great-grandparents owned a Rembrandt or a Monet, it’s going to be worth millions of dollars today versus a relatively small investment on their part.  Despite this, over the years your family owned it, you wouldn’t have been able to use the appreciation in the asset to pay the rent or buy food unless you borrowed against it, suffering interest expense.

That is the reason these types of assets are often best left to those who can either:

A.) Afford to hold because they have substantial wealth and liquid assets elsewhere so that tying the money up in the investment is not a burden or hardship on the family.

B.) Those who have an intense passion for the underlying collection market and derive considerable pleasure from the art of collecting whatever it is they enjoy collecting.

I’d go so far as to say you should never collect anything about which you are not personally excited.

Asset Type #3: Those That are Stores of Value and Will Keep Pace With Inflation

Certain assets are intrinsically valuable enough that they can keep pace with inflation, assuming you bought them intelligently at the lowest price you can.  While not true investments, they do provide a bulwark that can be used in dire emergencies such as a Great Depression.

A classic example of this sort of asset is high-quality furniture bought in the secondary market from antique dealers or at auction; it very well may end up not only retaining its value but beating bond yields over the holding period!

Asset Type #4: Stores of Value That Will Keep Pace With Inflation but Have Frictional Costs

This is where gold and real estate fall.

These assets classes might keep you rich, but they won’t make you rich unless you deploy massive amounts of leverage to amplify the underlying return on equity.  In practical terms, that means if we were going to experience extreme inflation, it would be best to utilize leverage by either borrowing to purchase real estate or acquiring gold futures which has its drawbacks.

This is why you see a lot of wealthy families engage in something known as equity stripping (there are some asset protection reasons for doing it, but the economic returns are equally, if not far more, relevant, in my opinion).

Asset Type #5: Consumer Goods or Other Assets that Depreciate Rapidly with Little or No Resale Value

Without a doubt, when you look at the data and research, this is how most people spend their paycheck. From video game consoles to cars that lose tens of thousands of dollars the moment you drive them off the lot, new clothes to some new must-have gadget you’ll forget about in two years, this is what you find in the homes of most Americans.

Perhaps the quickest way to guarantee poverty or at least a paycheck-to-paycheck lifestyle is to purchase this asset with debt.

This is the reason lottery winners go broke.

This is the reason NFL, and NBA stars end up back in the poorhouse following eight and nine-figure career earnings.

This is the reason trust funds are exhausted.

Be very careful with the percentage of your cash flow you put to work in this category as it’s a sunk cost.

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On Thursday, PepsiCo Inc. reported its quarterly review which was better than expected. Pepsi recorded double digit growth in some markets but failed to improve its results in the soda market in the U.S. as many persons are now more health conscious than ever before. Current trends are recording a shift in lifestyle behaviours where consumers are limiting their consumption of carbonated soft drinks.and are leaning more towards healthier juices. According to Beverage Digest, the consumption of sodas fell to a 31 year low in the US in 2016.

In an effort to combat this development, PepsiCo has introduced new drinks to the U.S. market that have yet to meet wild commercial success reminiscent of campaigns past . However, since Pepsi introduced four new flavours of Diet Coke there has been an increase in demand for its Coke Zero sugar beverage. Sales for Coke has outperformed other beverages and because of this, Pepsi has decided to increase its marketing spend on colas.

Revenue in PepsiCo’s beverage unit in the U.S. fell by 1 per cent; as soft drinks account for nearly a third of total revenue for PepsiCo. Overall revenue was USD$12.6 billion compared to the forecasted value of USD$12.4 billion. There was a 14 per cent increase in sales in Europe and the sub-Saharan African markets. On the other side of the globe, sales in North Africa the Middle East and Asia increased by 7 per cent.

In addition to beverages, PepsiCo also markets popular brands such as Frito Lay chips and Quaker Foods, which have done better on the market than beverages. Frito Lay sales increased by 3.4 per cent while Quaker sales remained unchanged due to negative pricing.

PepsiCo is currently trading on the NASDAQ at USD$103.26 per share.

 

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Recently, it was reported in international media that two black men were arrested in a Philadelphia Starbucks after the store’s manager called the police. It was later reported that they were waiting for an associate for a business meeting. A video recording of the incident went viral as customers expressed outrage and disbelief at what happened.

According to YouGov Brand Index, Starbuck’s reputation has been damaged as the company’s Buzz score fell from 13 to negative 8 since the news of the incident became public. YouGov measures the public’s perception of company brands based on what they hear or experience. Scores can range from -100 to +100 with zero being neutral. YouGov interviews 4,800 people every day and conducts over 1.5 million interviews per year.

Starbucks has since been trying as hard as possible to tackle the ‘negative press.’ They first apologized and then reported that all 8000 plus stores in the US will be closed in the afternoon on May 29 in order for employees to undergo anti-bias training. They will be trained on how to make all customers feel welcomed. This training will be critical to the future success of Starbucks.

Surprisingly, Starbucks’ share price did not fall significantly. On Monday, the stock closed at USD$59.43 and on Thursday closed at USD$59.22. Evidently, the company’s response to the incident has somewhat appeased customers and investors. However, the company’s bottom line may be affected as it is estimated they may lose between USD$6 million to USD$8.7 million in sales once the stores are temporarily closed.

Many persons describe Starbucks as a ‘third space;’ a comfort space which is neither home nor work. The coffee may be expensive and not well known for being of superior quality but customers enjoy the brand and the space. This is why it is crucial for Starbucks to effectively address the situation and ensure it does not repeat itself.

Even though the incident is not a one- off situation, we at SSL continue to recommend the stock to our clients as it has consistently performed well over the years.

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With a total of nine initial public offerings (IPO) confirmed so far to be launched in the first quarter of 2018, the volume of listings to the Jamaica Stock Exchange strongly indicates that the total number of companies to list will surpass that of 2017. 

There has been noted increase in companies choosing to raise capital by offering part ownership through shares on the stock exchange. This is partly due to fringe benefits of listing which include an entity avoiding taking on additional debt, and five years break from paying income taxes. 

What kind of companies tend to go to market you wonder? Firms ideally should have a marketable value proposition and have at least a few years financial statements to help fulfill the process of filing a prospectus. They should be willing to adhere to the regulations that govern publicly traded entities and should be prepared to offer long term value to shareholders. 

The Jamaica Stock Exchange got a boost of confidence in 2015 when Bloomberg noted the 39 year old entity as the best performing exchange in the world. For this year, medical tech company Elite Diagnostics and new financial entity Sygnus Capital are among the first expected to launch prospectuses in January. For the first time ever in the stock exchange’s history, an educational institution- University College of the Caribbean will seek to offer shares to investors. 

Additional proposed entities on the roster for a 2018 listing are Caribbean Insurance Brokers, Everything Fresh, Winchester Medical, Medican JA and others.

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PanJam Investment Limited has expanded its interests recently to include a 20 percent minority stake in a micro financing company, Term Finance Jamaica Limited. The micro financing company is a subsidiary of Term Finance Holding Limited, which has an 80 percent stake in the  company. Term Finance operates in six other Caribbean countries in addition to Costa Rica.

But what makes Term Finance Jamaica Limited stand out when there are many other similar micro financing companies?

Term Finance operates solely online and who wouldn’t prefer that approach. We live in a technological age where the click of a button on a smartphone or a computer is more widely acceptable than walking into an office. It is more efficient, faster and saves time. This is not only beneficial to clients but also to the company as they save money from not having to set up and operate a physical branch.

Term Finance began operating online in Jamaica in September 2017 but went live in November and in just four hours of business, the company issued its first loan. The secret is in checking the applicant’s credit score. Once this is completed the process takes little to no time. The company achieves this through algorithms and proprietary systems and technology that help to reduce costs. Term Finance wants to ensure that their customers are able to save money in the application process  and also through the low interest rates. The company’s three months loan is priced below 10 per cent but in other countries the rate is at 12 per cent.

Term Finance Jamaica Limited is looking to increase its loan book in 2018 and hopes to achieve this through more frequent engagements with the public.

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Seprod Limited [JSE:SEP] has announced that it has arrived at an agreement with its largest owner Facey Group Limited, to acquire its consumer business Facey Consumer at an undisclosed sum,  consisting of only Facey’s consumer brands such as Eve and Delight and pharmaceutical products.

Facey is a leading value-added distribution group with operations in the Caribbean, Central America, Europe and the Pacific. Today, Facey is one of the largest private companies domiciled in the Caribbean.

With this acquisition Seprod will be gaining warehousing space and real estate at 53 and 61 Newport Boulevard at Newport West, Kingston. Moreover, the most important part of this acquisition is the leveraging of company’s brand through a larger distribution network.

As was stated leveraging and strengthening the manufacturing company’s distribution platform is its main priority. CEO and Managing Director Richard Pandohie of Seprod, stated “the acquisition of Facey’s consumer business will allow Seprod to take its distribution capabilities to the next level by giving us control of an established, first-class distribution network which is needed to support the continued expansion of our businesses and expand our portfolio of market-leading brands.”

Whereas Seprod’s Board unanimously approved the acquisition of Facey Consumer, it still has some fine details to iron out, such as a definitive legal document and approval from its other shareholders which is scheduled for April 9, according to the Financial Gleaner. Furthermore, Pandohie is of an optimistic view that all will go well and by late June early September of this year this new acquisition will be up and running.

Seprod Limited, together with its subsidiaries, operates through two segments, Manufacturing and Distribution in Jamaica. The company’s products primarily include beverages, cleaning products, dairy products, industrial products, personal care products, produce and distributes consumer goods. The company offers its products primarily under brands such as Miracle, Serge, ButterKist, Pronto, Swizzle, Lider, Monster, Betty and Supligen to name a few. Seprod Limited was incorporated in 1940 and became a public company and was listed on the Jamaican Stock Exchange in 1985.

Currently Seprod Limited is trading at a price of $33.50 and we here at SSL recommend a ‘BUY’ for the manufacturing company, as it has considerable activities in its pipeline.

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While we continue to monitor the controversy surrounding Facebook [NYSE: FB], news has now surfaced of another company facing similar issues which may affect its stock value in the coming weeks. Netflix [NYSE: NFLX] is the latest victim of a boycott from Brazilians, an international market which provides the company with a vast number of subscribers.

There is now an active #DeleteNetflix campaign on Twitter, protesting the original Netflix series ‘The Mechanism’ which was aired last Friday. The Mechanism is a fictional show based on a true story of a corruption investigation in 2014, most popularly known as ‘Car Wash.’ It involved business leaders, multinational corporations and not surprisingly, politicians. The investigation was initially targeted towards black market dealers who used small businesses such as gas stations and car washes for money laundering purposes. In other words to wash illegal money. Over 150 persons have already been arrested in the probe, prosecuted or were brought before the courts. This made ‘Car Wash’ one of the most talked about and most complex corruption scandal of all time in South America.

Impeached former President of Brazil, Dilma Rousseff, described the show as ‘underhanded and full of lies.’ While movie critic Pablo Villaca also chimed in on the issue referring to the series as ‘irresponsible.’ He cancelled his subscription to Netflix after been a loyal customer for six years and further encourages others to follow suit. Villaca lamented that the producer of the series is ‘a creator of fake news’ and equated the series to a ‘movie where Winston Churchill makes a deal with Adolf Hitler to attack the United States.’

Now wouldn’t that be a complete fallacy?

The series director, Jose Padilha, subsequently responded saying, ‘critics are too focused on the details and missing the bigger picture.’ However, since we all know Padilha is a native of Brazil he shouldn’t be surprised that the series has gotten this type of attention and criticism from Brazilians. While standing firm on his position that the series is non-ideological, Padilha may have contradicted himself as he further stated, ‘We can’t blame the messenger.’ He seems to think Brazilians are overreacting and he has no plans of cancelling the series. Padilha hopes to air as much seasons as possible until corruption ends in Brazil; which may very well be a long time.

While Netflix is yet to officially respond to the uproar, the company recently posted a video on its Twitter page with a video of an advertisement which reads, ‘corruption store.’ Additionally, the ad depicted items such as ankle monitors and pocket underwears to facilitate store bribes.

We anxiously await Netflix’s response to this development as well as the impact on viewership and subscription. This is definitely one to watch.

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Naspers Ltd, the Cape Town-based company, is selling $10.6 billion of shares in Tencent Holdings Ltd., equal to 2 percent of the stock in the Chinese operator of the WeChat messaging service, in one of the greatest venture-capital investments ever. The stake Naspers bought for just $32 million in 2001, when Tencent was an obscure website in a nation where few people used the internet, is now worth $175 billion.

Asia’s most valuable company warned it would sacrifice short-term margins, spending on content and technology in pursuit of growth.

We continue to believe that Tencent is positioned to be one of the very best growth enterprises in any industry in the world. This firm saw EPS growth of 30.9 percent last year, with the current growth estimate for this year calls for earnings-per-share growth of 39.6 percent. Furthermore, the long-term growth rate is currently an impressive 27.2 percent, suggesting pretty good prospects for the long haul.

And if this wasn’t enough, the stock has seen estimates rise over the past month for the current fiscal year by about 1.9 percent. Thanks to this rise in earnings estimates, Tencent remains a strong buy which further underscores the potential for out-performance in this company.

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Tension between the two biggest trade partners has intensified, as China announced its first of many retaliation against metals levies hours after President Donald Trump outlined new tariffs on $50 billion of Chinese imports.

China was not pleased and divulged a $3 billion tariffs on U.S. imports. U.S. stock futures dropped, signalling a further retreat for the S&P 500 Index after falling 2.5 percent. This escalation does not inspire confidence in the global scheme of trading especially in the case of  economic growth.

Suppliers to Apple Inc. were among the hardest hit in Hong Kong and mainland markets on Friday, as investors focused on potential losers from the trade spat.

Our analysts agree that China’s response is surprisingly modest in light of the U.S. actions, suggesting there could be a good deal more to come. And lest we forget that China is the largest foreign owner of U.S. Treasuries, therefore China has considerably more leverage over the U.S. some things President Trump is choosing to ignore.

China reportedly is set to pursue legal action against the U.S. at the World Trade Organization in response to planned tariffs on steel and aluminium imports. If China and the U.S. can’t reach an agreement on steel and aluminium trade following a public consultation period ending March 31, Beijing could begin collecting tariffs of 15 percent on imports worth $977 million, including fresh fruit, nuts, wines, denatured alcohol, ginseng, and seamless steel tubes. After evaluation, China could then implement tariffs of 25 percent on around $2 billion worth of product imports, including pork and aluminium.

We are concerned that a trading war could undermine the broadest global recovery in years. Meanwhile, business groups representing companies ranging from Walmart Inc. to Amazon.com Inc. are warning U.S. tariffs could raise prices for consumers and sideswipe stock prices.

We will be monitoring this one closely.

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The controversy surrounding data mining firm, Cambridge Analytica has been reflected in Facebook’s stock value. Cambridge Analytica has been accused of stealing personal information through Facebook from approximately 50 million users. The information collected was said to be used to win the 2016 Presidential Election in favour of the Trump Administration, a client of Cambridge Analytics .

They extracted data from millions of Facebook profiles by creating personalized models based on people’s profiles, then promoting Trump through advertisements that would be appealing to users. Cambridge Analytica is now under criminal investigation as their actions are said to be illegal. Facebook allegedly knew about a breach in security and went ahead in suspending Cambridge Analytica from advertising on their platform.

After news broke about the infringement on Friday, Facebook’s stock price declined by 4.5 percent at the end of the trading day. As word spread further, two major new outlets posted details about the connection between the data firm and Facebook, the stock price continued to plummet, falling by 6.8 percent on Monday (the most it has ever declined since 2014) and then opening 5 percent below on Monday.

Due to these reports, Facebook is now being investigated by the Federal Trading Commission and Cambridge Analytica is being investigated by The U.K. Information Commissioner’s Office. As a result of this and information still being made public factors uncertainty and anxiety among current shareholders are on the rise. Facebook’s stock had experienced a decent start to 2018, with shares rising by about 4.9 percent, but the stock has since underperformed the broader Technology Select Sector SPDR ETF.

Based on an analysis of the stock’s charts, signs are showing that Facebook could be headed 10 percent lower, with the potential to fall by as much as 20 percent. Regardless, we encourage investors to hold their shares, and view this fall as a buying opportunity while keeping abreast of the changes in its case with Cambridge Analytica.

We are bullish on tech companies because history has shown that they have the ability to bounce back following adversity. Buying more shares in Facebook now can possibly prove fruitful in the near future.

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Snapchat Inc. (NYSE: SNAP) has been taking a lot of hits recently, from Kylie Jenner $1.3 billion “does anyone else not open Snapchat anymore?” comments to “Would you rather” game featuring Rihanna and Chris Brown.

The ad, which was created by a third party cost Snapchat $800 million as well as a 4% plunge in stock price. Since its IPO Snapchat has been one of those lacklustre performing company that should only be used a trading play rather than be considered an investment option.

Let’s not kid ourselves, Snapchat is not the new Facebook (NYSE: FB) or Instagram, of which both of these social networks have already added Snapchat’s most notable features into their platform while maintaining their domination of market share.

Rihanna who has over 61 million followers, responded to the offensive ad – would you rather “slap Rihanna” or “punch Chris Brown”, “You spent money to animate something that would intentionally bring shame to DV victims and made a joke of it!!!” she posted on her Instagram story.

Following the post, Snapchat apologised for the ad that referred to the Rihanna assault by then-boyfriend Chris Brown in 2009. But is the damage done?

If there is any confusion about how powerful market sentiment is, consider this exhibit A.

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Now valued at $500 billion, Tencent Holdings Limited has become Asia’s first technology company to reach such remarkable value. The Chinese tech giant also boasts the title of being the fifth largest internet company in the world. Since the release of their IPO in 2004, Tencent’s stock price has increased astronomically by 11,000 percent. Therefore it did not come as a surprise when the company recorded a 115 percent increase in its stock price in 2017. Earnings per share grew 65 percent, and revenue is estimated to be $10 billion. Tencent Holdings Limited plans to release its financial statement for 2017 on March 21, 2018, and we are excited to see its performance.

Tencent Holdings Limited is an extraordinary company which, over the years, has expanded into payment services, property, advertising, e-commerce and gaming. Tencent’s WeChat has taken the company to another level. It is described as the heart of Tencent Holdings. Similar to apps of the western such as Facebook, Snapchat and Instagram, in the East (China), the social media add that dominates is WeChat.

WeChat while it has its similarities to the others, it has its differences. WeChat allows users to send money across China. The service is called WeChat Pay. It is used by 800 million Chinese. It is similar to Visa or MasterCard as persons can use it to purchase goods. WeChat is a cashless system utilized by even street vendors. How incredible is that?

Tencent Holding’s most popular game, Honour of Kings, now has 200 million monthly players. In 2016, the company purchased the majority stake in Clash of Clan’s Supercell and recently partnered with Nintendo. For a company that has not yet fully explored the western gaming market, but is considered the largest and most valuable gaming company in the world, the possibilities are endless for Tencent Holding.

We recommended TCEHY when the company was trading at US$23.17, now currently trading at US$ 59.73, a 157.79 percent gain in just one year!

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Supreme Ventures Limited (SVL) recently reported that the company has signed an agreement to open up gaming operations in Guyana. The agreement was signed with Guyana’s Gaming Authority, which could see SVL infiltrating the gaming industry in Guyana dominated by hotel franchise, Princess Hotel and Casino.

Details of the agreement have are still forthcoming, however, it is clear that SVL intends on expanding its reach across the region and with this move there is a greater opportunity for the company to increase revenue and net profit in the coming months.

The local gaming industry, as stated by the Betting, Gaming and Lotteries Commission, amassed revenue of $135.6 billion between 2015 and 2016. Of that amount, video lottery terminal accounts for $16.7 billion, a 22 percent increase from previous years, while 19 and under gaming operations made revenue of $1.4 billion. A significant portion of that total was contributed by lottery games, which accounts for nearly one- third of the gaming industry.

Additionally, lottery gaming made revenue of $34.1 billion and the betting sector accounted for $317.3 million in 2016. Supreme Ventures Limited made revenue of $45 billion in 2016, a 2 percent increase from 2015.

Guyana currently has gaming products including different scratch and win games, Draw d Line, Lotto Supa 6, Lucky 3 and Daily Millions.

We do recommend that our clients purchase this stock and with news of an expansion, we look forward to see the performance of the company for 2018.

Cable and Wireless Jamaica Limited, most commonly known as FLOW, recently announced that they have accumulated a tax cushion of $44.8 billion, as a result of tax losses the company incurred over a number of years. FLOW has been operating at a loss for years due to a debt of $60 million owed to parent company Cable and Wireless Communications and a consistent reduction in the value of assets, among other reasons.

Despite all this bad news, something positive came about. Based on the tax losses of $44.8 billion, the company is able to offset against any future profit, once the Tax Commissioner and the Tax Administration of Jamaica decides how it should be used.

Furthermore to the tax loss announcement, FLOW released its 2017 financial report. In 2017, they made an operating profit of $5.02 billion, however, it had to pay $5 billion owed to CWC Entities for debt financing charges. While a net loss of $383 million made the $261 million profit the company made in 2016 insignificant, FLOW managed to increase its revenue by 8 percent to $27 billion compared to $25 billion in 2016.

Additionally, with thousands of new customers under its belt, FLOW announced an 11 percent revenue growth for broadband services and 18 percent for mobile services.

Unfortunately, the 2017 financial report can be the last publicly released by FLOW, if the stock is delisted due to acquisition of majority of shares by CWC Cala Holdings. In the meantime, trading of CWJ stock on the JSE has been suspended until March 22, 2018 and will resume trading on March 23, 2018.

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The latest Amazon venture in its quest to infiltrate every industry, has recently delved further into the world of Fintech. There has been reports of Amazon currently in talks with banks such as Capital One and JP Morgan Chase about implementing hybrid checking accounts for its customers. If this comes to fruition then many persons, especially millennials without bank accounts, will be the main target.

Many may ask; will Amazon open a bank? Well, the answer to that is no. They will be in partnership with a bank on a product to benefit its customers while also benefiting the company. This move would see the company benefitting from not having to pay high fees to financial firms and allow the company to better understand the spending habits of its customers.

This may be a great move as more and more Gen Xers and millennials are tech savvy than ever showing a preference to flexible options and lower fees. Investors should note that this is not Amazon’s first time trying to enter into the financial services. Last year they launched Amazon Cash, a service similar to PayPal where customers could add funds to their account in order to buy for goods online. Amazon cash offers a Prime Reload Visa card from JP Morgan Chase. Additionally, Amazon Pay, another financial service offering from Amazon, allows customers to shop and pay for goods on other sites without re entering their credit card information.

Amazon is still in the early planning stages and there is skepticism from analysts as to the likelihood of this idea coming to fruition. Nonetheless, there is no denying that with Amazon anything is possible.

We are waiting to see how the company perfects this idea and the results of the discussions with banks. If you still have not purchased Amazon, now may be a great time to do so.

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Caribbean Producers Jamaica CPJ [JSE: CPJ] has announced that it will spend an additional USD $500,000 this year and going into 2019 for further upgrade of its plant, after upgrading its manufacturing line at the cost of USD $350,000 according to Chief Executive Officer, David Lowe.

Currently, CPJ operates on 125,000 square feet and plans to expand its warehouse space by 60,000 square feet as it aims to meet increased demand while improving efficiency. The company aims in the expansion of its new seven-acre complex, to upgrade their distribution operation and cold storage capacity.

Lowe stated “we are investing in upgrading our warehouse management system to accommodate the management and rotation of our large and diverse portfolio of frozen, dry and chilled food categories – totalling over 4000 Stock Keeping Units (SKU).”

Caribbean Producers Jamaica Ltd. (CPJ) was established by Mark Hart and Thomas Tyler in 1994 in Montego Freeport, St. James. The company was listed on the Jamaica Junior Stock Exchange (JSE) on July 20th, 2011. Caribbean Producers Jamaica Ltd. is one of Jamaica’s leading food service retailers, manufacturers and distributors in the retail and hospitality sector. The company offer a wide array of international and locally manufactured products including wines, spirits, beverages, groceries, meats and select seafood. CPJ also exclusively distributes Lifespan water, which has been gaining significant market share.

Currently, CPJ is Trading at $4.62, and Stocks and Securities Limited recommends a hold on this stock, as CPJ is on a growth and expansion stage.

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Having allocated additional space for inventory, Honey Bun Limited will add a fourth production line to its operations. Honey Bun hopes that this investment will increase revenue and profits for 2018. The expansion is not only limited to factory space but extends to the innovation of new products. The company recently developed new flavours for the Goldie cream-filled cake it is most famously known for. The new flavours include strawberry and black forest. Increasing the total flavours for Goldie to four, alongside vanilla and chocolate.

Additionally, Honey Bun will be making other products soon to hit the market such as shorty hamburger buns and cassava muffin. These new products will be showcased at Expo 2018 to be held next month.

The additional factory space was a necessity for the company in order to expand production. However, there is the need for more equipment as well. Honey Bun will purchase new equipment based on a production schedule they have devised in order to avoid debt financing. The company currently has three production lines and will be splitting one of the lines into two in order to create the fourth line once the equipment arrives by next week. Honey Bun is optimistic that they will max out the new space by the end of 2018 and should start a new expansion project by then.

In 2017, revenue for Honey Bun increased by 5 per cent from $1.19 billion to $1.25 billion in 2017. However, net profit decreased by 32.7 per cent from $139.5 million to $93.9 million in 2017. This decrease was attributed to the lack of space which hampered production and delayed the purchasing of more equipment.

Honey Bun Limited produces various pastries such as buns, cakes and breads and is currently trading on the Jamaica Stock Exchange at $4.48.

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FosRich Company Ltd. (JSE: FOSRICH) released their audited financial statements for the financial year(FY) ended December 31, 2017.

The company’s first financial report post IPO sets a positive tone for 2018.

FOSRICH saw a sharp increase in its net profit of  JMD $54 million or 81 percent when compared to the previous financial year of JMD

$30 million; as a result of other income and gains in currency conversion.

FOSRICH also displayed excellent financial management having increased Return on Assets (ROA) by more than 50 percent in 2017 of 4.2 percent compared to 2.7 percent in the prior year.

Furthermore, the company expanded its Return on Equity of 9 percent when compared to FY 2016 of 7.6 percent. This is as a result of the marginal growth in the company’s total assets and decreases in total liabilities such as payables and current portion of long-term liabilities.

Moreover, FOSRICH increased its retained earnings by 48 percent giving them leverage to invest more in core business functions for further growth in the 2018 FY.

FOSRICH reported robust growth in its cash and cash equivalents in 2017 by 621.7 percent; an increase of JMD119.8 million when compared to financial year 2016 JMD-22.9 million. This notable increase was as a result of the growth in financing activities of 245.9 percent from listing on the JSE and also the decrease in cash used for investing activities of JMD-7.6 million compared to -10.5 million in FY 2016. Currently, FOSRICH is trading at 2.70 with a Price to Earnings (P/E) of 24.49x.

Overall FosRich Company Ltd. displays good financial health with good financial management, and while there are some potential risks such as currency risk, FosRich remains a strong buy recommendation.

 

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