138 Student Living Stock Triples In A Month

THE SHARE price of real estate company 138 Student Living Jamaica, 138SL, which builds and rents dorms to students at The University of the West Indies, more than tripled in less than 30 days to become one of the top-performing stocks so far in 2019.

The stock moved from $1.63 in late January to over $5.30 on Wednesday.

Rather than market exuberance, trading experts see it as a recovery of the stock.

Investors had seen a large discount in the stock price, which at under $2 was trading at less than the company’s book value of about $8 per share. That’s to say that if the company sold all its dorms and other assets and paid off its debt, then shareholders, in theory, would get $8 per share for a stock most bought for a lot less on the market.

“One assumes the main thing Sagicor and others see is that the stated valuation of the properties would have the company book value at about $8 per share and 138SL is now trading at around 66 per cent to that,” said Mark Croskery, head of brokerage firm Stocks & Securities Limited. Sagicor Group Jamaica currently holds the largest block of shares in Student Living through various entities.

Croskery added that any further rise should come with a catalyst, namely, that of improved financials.

Sagicor Group holds 40.47 per cent or 167.7 million units of 138SL, and its chairman, Richard Byles, also chairs Student Living.

During the stock run, the volumes remained slim with only three trades above 400,000 units for the year so far, but there’s been small trades almost on a daily basis. The top 10 shareholders hold as much as 92 per cent of the stock and the top four, around 82 per cent.

“So it is a very illiquid stock,” Croskery said. “The large price upward movement has been on trading levels of roughly 500,000 units or less throughout the period as a benchmark from a daily standpoint.” 

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