Why are people selling JBG?! 52-week low today of $5.75.

Jamaica Broilers Group Limited traded at its 52-week low of $5.75, today Thursday – November 24, 2011. This means, this is the lowest the stock has traded in a year.

The Board of Directors recently declared an interim dividend of $0.06 per share payable on December 2, 2011 to shareholders on record as at November 15, 2011. The ex-dividend date is November 11, 2011.

While the company remains solid, their performance has been relatively stable, which is probably below the expectations of shareholders.

JBG trades at 52-week low

Rising Commodity Costs

In January 2011, Jamaican consumers were warned to brace for higher food prices as the soaring cost of grains on the international market was expected to impact the cost of feeds used in the production of diary, poultry, meats and eggs.

In addition, the price of oil had reached almost US$100 per barrel, which significantly impacted the cost of transportation and contributed to driving up the grains complex for corn, wheat and soybeans over the past few weeks. Global reports at the time were that the soaring prices of grains would continue to push up the cost of feed, diary, poultry, milk and meat worldwide.

This was further highlighted and the impact seen in their first quarter results (quarter ended July 30, 2011). They reported that the cost per bushel for corn moved from US$4.20 to US$7.40 which forced them to pass on the price increases in the poultry and feed operations. This helped to lead to a decline in the first quarter profits.