Home' Trinidad and Tobago Guardian : January 4th 2015 Contents In 2014, all three stock indices
declined in value. The best perform-
ance was exhibited in the All T&T
index, which lost less than one per
cent, corresponding to 10.65 points,
to close at 1,983.07. On the other
hand, the Cross-listed index ended
the year at 40.67; this represented
a decline of 8.76 points or 17.72 per cent.
This article will deal only with those com-
panies that exhibited price changes at the
extremities. The cut-off point was price move-
ments (plus or minus) that exceeded ten per-
In percentage terms, LJ Williams Ltd "B"
shares posted a gain of 38.46 per cent as its
share price advanced from $0.65 to $0.90.
This share is not actively traded; however, the
improved results for its 2013/14 fiscal period
together with the resumption of dividend pay-
ments probably helped push up the share price.
One Caribbean Media Ltd saw its share
price improve by $6.50 or 35.14 per cent to
end at $25.00. Difficult conditions outside of
Trinidad & Tobago have restrained its profit
Many traders enjoy dealing with National
Flour Mills shares at different times of the
year. Fortunately, by year s end, its price was
21.05 per cent greater that the $0.95 at which
it started 2014.
Unilever Caribbean Ltd continues to deliver
slow and steady results, helped by some one-
off transactions, initiated at the parent-com-
pany level. Its $8.30 price appreciation trans-
lated into a 14.77 per cent annual gain.
In dollar terms, Massy Holdings Ltd reg-
istered the second largest appreciation of $8.24;
this translated into an annual gain of 13.73 per
cent. Massy is confident that its recent and
costly ($57.9 million) rebranding exercise will
bear fruit in the coming years.
Trinidad Cement Ltd had an exciting year.
This was highlighted in August when a "palace
coup" saw the exit of the old regime and its
replacement with a new slate of directors. The
modest capital appreciation of $0.30 repre-
sented an annual gain of 13.64 per cent.
Leading the pack was Flavorite Foods Ltd,
which share price contracted by a huge 41.53
per cent, ending at $4.80. This company con-
tinues to restructure its business, incurring
significant one-off charges; even so, it con-
tinues to be profitable. Perhaps, by the end
of 2015, more definite signs of recovery could
First Caribbean International Bank endured
a 26.92 per cent price contraction to end the
year at $4.75. Much of this can be attributed
to the US$116 million goodwill impairment
and a US$115 loan loss charge it took in the
second quarter. Nevertheless, this bank s core
profitability, although challenged, continues
to be reasonable and its dividend has been
maintained at US$0.03.
Over the one-year period, Sagicor Financial
Corporation s share price contracted by almost
18 per cent, ending at $5.95. Like FCIB, it has
maintained its dividend at US$0.04. Prof-
itability has held up reasonably well.
Investors are anticipating a special "one-
off" hit very soon that will completely remove
the adverse effects of its former European
Due to its hold on the psychology of many
locals, Scotiabank Trinidad s price decline of
$11.50 (15.23 per cent) seemed to have triggered
the most consternation and discussion among
The decline was entirely logical as profits
up to its half-year were lower than for the
same period in 2013. Profits recovered some-
what in the third quarter. When the fourth
quarter and full year s results were released,
we saw that overall profits came in higher
than the previous year. This improvement was
helped, in part, by the fortuitous sale of its
HMB shares to the NIB.
Readymix (WI) Ltd is another share that is
infrequently traded. Despite its improved prof-
itability, its price decline was entirely logical
as dividend prospects are still heavily depend-
ent on developments at its parent company,
Shares in Jamaica Money Market Brokers
Ltd are regularly traded and frequently expe-
rience wide price swings. It was not surprising
that JMMB s price slipped by 13.73 per cent
over the one-year interval. Price swings are
more pronounced when the "base price" of
a share is less than $1.00.
Bringing up the rear, LJ Williams "A" shares
declined by $0.03 or 10.34 per cent. This fall
could be attributed to an adjustment relative
to the value of the "B" shares. The "A" shares
have a nominal value of one-tenth of the "B"
shares but they command ten times the voting
power of the "B" shares.
Looking for perspective
While it is encouraging to have one s share
values appreciate significantly, most investors
recognise that a one-year decline is often not
a valid reason to dispose of one s investment.
Considerations such as changing economic
conditions and company specific prospects
remain valid reasons why investors continue
to cling to their particular holdings.
The lack of market liquidity and depth also
influences the price at which a retail investor
can trade a particular share. Another reason
is that many investors have a fixation that
they will not sell at a price lower than their
Interestingly, a 2014 survey* conducted by
Natixis Global Asset Management showed that
as many as 26 per cent of investors defined
their success in the following way: "only mak-
ing gains and no losses."
Not surprisingly, the lowest percentage (18)
was recorded among US-based investors while
30 per cent of those respondents based in
Europe gave this answer.
US investors, who operate in a market econ-
omy, are more accustomed to wide price swings
and less certainty in their lives.
The same survey stated that 80 per cent of
investors make decisions based on gut instinct,
70 per cent have no financial plan and 60 per
cent have not set financial goals.
These results could suggest that solely look-
ing at one-year price changes is not a good
way to set about achieving any realistic financial
Some picks for 2015
While trying to predict the future is always
hazardous, I have selected four companies that
could be expected to "do well" during this
year. My definition of "doing well" is limited
to higher profits and improved dividends; in
the short term, the "market" does not always
reward companies with "strong price appre-
The first two companies share a common
parent: Vemco Ltd. Agostini s Ltd and Prestige
Holdings Ltd are both committed to growth,
both organic and by selective acquisition.
Already, Agostini s Ltd, after releasing its
2014 audited results, clearly stated that it was
close to completing an acquisition. Dividends
per share for the 2014 year were increased
from $0.46 to $0.55.
A similar announcement could be made by
PHL as it strives to broaden its range of con-
sumer offerings. It is not clear if it will go
with a high-end franchise (few outlets but
higher-priced menus) or a broader-based chain
(such as Linda s Bakery Ltd). PHL will release
its 2014 results at the end of January or early
My next two choices can be described as
"companies in transition".
Who will be allowed to buy the majority
shares in Angostura Holdings Ltd, which are
presently owned by CL Financial and Clico
interests? Or, will the government try to restrict
the placement of shares to local institutional
investors? It seems unlikely that local insti-
tutions have the marketing prowess to suc-
cessfully leverage AHL s many strengths.
How will the vexing matter of the debt owed
to Angostura by CL Financial be resolved?
Will it benefit shareholders directly?
Alternatively, will the funds be "sterilised"
and used to buy an existing rum refinery in
a US territory, which can conceivably help
boost rum sales to that market?
Perhaps, these and other ancillary issues
will become clearer before or soon after AHL
releases its 2014 results in March?
Another company in transition is Trinidad
After the August directors coup, the com-
pany has successfully courted and won over
the trade union.
Now, a special meeting is carded for January
22, 2015 to update shareholders on its restruc-
turing plans. Among the agenda items are the
removal of the 20 per cent restriction on share
ownership and a proposed rights issue. Both
these items are directly related to the debt
negotiations and larger restructuring plan for
A little further down the road, there is some
speculation that Cemex will make an offer to
buy the entire company. Perhaps, for politically
practical reasons, they may decide that a 51
per cent interest in TCL is adequate.
With effective control assured, they will
join the ranks of Witco, Unilever and Scotia-
Over time, they can selectively integrate the
local and Caribbean operations of TCL with
the larger interests of Cemex in Central and
South America. This will also provide oppor-
tunities for employees to expand their career
paths and to work in different jurisdictions.
*The 2014 survey, conducted by Natixis Glob-
al Asset Management, comprised 14 countries
among 5,950 individuals with a minimum net
worth of U$200,000.00 (or Purchasing Power
JANUARY 4 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
2014 stock review, picks for 2015
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