JSE stocks pick 2020
By Marston Gordon
Jan 8, 2020, 07:54

The main and junior market indexes had varied performance with the former gaining and the latter declining relative to 2019; the average price of the main market appreciated by 41.58% and the junior market showed a marginal decline of 1.63%.

The outcome of our 2019 selection was:

AMG Packaging 11.05%
Purity ( 2.35)%
Pulse Investments 100.67% (6th place- main market)
Sterling Investments ( 7.48)%
Seprod 70.16%

2020 Picks
Pulse Investments is one of two main market stocks to make it to the top 10 again in 2019, for the junior market ISP Finance Services and Stationery & Office Supplies had repeat appearances.
Ironically, the worst performing stocks in 2018 did not do well in 2019, in fact some continued among the worse in 2019 e.g. Ciboney Group and GWEST Corp. The message is investors need to be more discerning in 2020.

the last quarter of 2019 signals a turnaround in the fortunes of the company although the impact of the claim under the concession agreement is unspecified. Arbitration award of $54.2m is non-recurring and bad debt and utility cost seem to have been contained.
Net book value stands at $13.38 and operating cash is positive. There is a huge overhang of sellers at the IPO price of $4.00 but the risk return is good and if Q1 2020 follow through on the previous quarter the stock price could surge.

stock continues to trade at a discount to book but we maintain our target price at $3.00

good signs that strategic direction is bearing fruit and now might be a good time to take a long term position.

a definite real estate play and if Villa Ronai comes fully on stream in 2020 it will be a game changer. Major drawback is the lack of interest by institutional investors.

excellent management in their strategy and execution, expect huge payoff in short order.

Source: Jamaica Stock Exchange

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