Valuation
Based on the factors mentioned above, our base case forecast for LASD is that they have a fair value of J$4.67. The stock has a total return upside of 16.63% when compared to the current price of J$4.05. Given the underlying economics of the Company coupled with the ongoing impact of the COVID-19 pandemic, Barita Investments Limited’s recommendation on this stock is OVERWEIGHT.
Business Economics
The Company distributes one of the broadest range of fast-moving consumer goods under its own LASCO label and other sub-brands such as Curves and iCool. The Consumer Division primarily distributes food, beverage, personal care, baby care, adult incontinence, and home care products. LASCO also distributes Unilever’s home and personal care portfolio with Breeze, Dove, St. Ives, Mistolin, and Axe. Another core supplier partner is Salada, with its brands of high-quality Jamaican coffees; Jamaica Mountain Peak and Mountain Bliss 876, and their range of teas. The Pharmaceutical Division distributes major international brands in ethical, over-the-counter (OTC), animal health and equipment, and its private brand of generics under the LASMED brand name.
LASCO’s route to market covers all core channels, including Supermarkets, Wholesalers, Small Shops, Schools, Pharmacies, Government Institutions, and health care facilities across Jamaica.
| Stock | Lasco Distributors Limited |
| Last Price (J$) | $4.05 |
| Year to Date Return | 26.56% |
| Dividend Yield | 1.27% |
| Price/Book | 2.20 |
| Forward P/E | 11.60 |
| Estimated Fair Value (J$) | $4.67 |
| Estimated Shareholder Return Upside/Downside | 16.63% |
| Recommendation | OVERWEIGHT |
As at July 15, 2021
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