James
Dennise Williams, Staff Reporter
JAMAICAN FINANCIAL service provider, Dehring Bunting & Golding (DB&G) had the highest volume traded on the Trinidad & Tobago Stock Exchange (TTSE) for the month of February.
During that month there were 15 million shares traded on that exchange of which DB&G represented nearly 30 per cent.
To find out the company's perspective on their activity on the TTSE, we spoke to the head of DB&G's brokerage division, Vernon James.
"What's been happening is that we listed on October 12 at an undervalued price. In the Trinidad market, their price valuation for the financial services sector is 18-19 times earnings. Even now, DB&G is trading at 10 times earnings. So we are valued at half their average price earnings requirement."
A GOOD BARGAIN
And this means that in the Trinidad and Tobago market, DB&G is considered a good bargain.
Mr. James continues, "After the release of our last earnings, in a liquid market such as Trinidad there was a lot of interest in our stock.
For the period ending December 31, 2004, DB&G recorded net profit after taxation of $234.7 million for the quarter ended and $460.3 million for the nine-month period ended on the same date.
Mr. James then goes on to explain, "DB&G is considered a high growth company on the Trinidad market and so the stock is considered a bargain for them. Basically, the market is willing to pay 19 times the earnings for companies in the banking sector and so there is a lot of room for our share price to grow."
But what qualifies DB&G as a high growth company? Mr. James states, "Trinidad investors think DB&G is a high growth company because the growth in earnings for the last nine month results for December 2004 compared to December 2003 was 90 per cent. Now in the Trinidad & Tobago market, a growth of 25 per cent is great because they have a lot of mature companies like Neal & Massy. So companies that exhibit our kind of growth are considered high growth."
However, no company can sustain 90 per cent annual growth rates forever and Mr. James explained that the model DB&G operates on is one that will indeed book growth, even if not as high as 90 per cent.
