Mayberry Jamaican equities touting value on market projections
Predicting a possible lowering of interest rates come 2024 and an uptick in the stock market, fund manager at Mayberry Jamaican Equities (MJE), Gary Peart, is touting MJE stock as “the only Jamaican stock (investors) need to own” as he reported on the performance of MJE for the financial year ended September 2022.
MJE produced a profit of US$33 million. But for the third quarter ending September 2023, net loss was nearly US$14 million.
Still, Peart is touting value in owning the stock, which is traded on the main market of the Jamaica Stock Exchange (JSE).
Peart said the equity value of the fund has recovered from a low of US$83.83 million in 2020 to US$130.96 million in 2022. Dividend income stood at US$3.57 million, rounding off a successful year for the fund, Peart said.
He told shareholders that the MJE fund currently owns 34 stocks listed on the JSE. It was incorporated in 2005 as a wholly owned subsidiary of Mayberry Investments, Mayberry Inv. After listing on the JSE in 2017, as of December 2022, Mayberry Inv. owns 50.4 per cent of MJE and the public owns the other 49.6 per cent; a near 10 per cent year over year increase, Peart told shareholder at the Fund’s annual general meeting on Wednesday. He says he sees this as a vote of confidence in MJE stocks.
Peart says considering the fund’s performance, shares in MJE represent a good buy. He outlines that the net asset value, or real value of each stock if all the holdings were to be sold off, has been consistently above the prevailing market value, meaning that the shares are trading at a discount, indicating more room to grow.
Peart says the increase in interest rates occasioned by the Central Bank’s drive to tame inflation has not been good for the stock market in general, and that is reflected in the fall-off in the various indices at the JSE. At the same time, Peart says the fall-off in market prices represents an opportunity for funds like MJE to pick up bargain stocks for the fund’s portfolio. He says this is one reason why the make-up of the fund was adjusted over the nine-month period ending September.
For the quarter ending September 2023 MJE increased its total liabilities by 73.5 per cent to US$45.49 million, an indication that the funds borrowed more. This was in a bid to purchase bargain stocks, according to Peart. He says when the market begins to witness lower interest rates, then MJE’s portfolio stocks will become more attractive and place stockholders in a better position.
“We have seen opportunities in the marketplace, and we’re positioned in some of these equities because we feel that when the market changes, the rate at which those gains come on board will overcome the cost of acquiring those at that point in time,” Peart explained.
Peart reported that as at September 2023, shares in Supreme Ventures Limited account for 54.2 per cent of the total portfolio. Shares in CPJ, Jamaica Broilers, Wigton and JMMB round out the top five, ranging between 6.7 per cent and 2.9 per cent of the fund’s portfolio.