Ashford W. Meikle, Business Reporter

Supreme Ventures Limited yesterday traded at its 52-week high of $3.70 as investors paid just under $178 million to acquire over 48 million of the company's shares in a cross-floor transaction.

"I don't know what is going on and I am trying to find it out myself right now. From what I know, it appears that Mayberry is facilitating the trades for its clients. But I am not sure why," a senior broker told Wednesday Business yesterday.

Over the past days, there has been aggressive activity in the SVL stock, with some 88 million shares changing hands at a market value of over $277 million.

The stock's heavy trading follows on SVL's strong earnings reported last week in which the company's net profit increased by over a 100 per cent, to $229 million, for its six months ending April 30.

"I think [Mayberry] believes the stock is undervalued," said Keisa Ansine, senior analyst at JMMB. "There is sound rationale supporting the expectation that the stock should rise above $4.10 in the long term. This is supported by its [six months] report - as well as the projections for future growth in the earnings."

Ansine said all segments of SVL's operations continue to pull in revenue.

Profit and loss surplus

"In July 2006, they accum-ulated deficit of $8 million on their profit and loss account. Just nine months later, they have accumulated profits sufficient enough to turn that deficit position into a profit and loss surplus of $257 million," she said.

But not all analysts are as bullish on Supreme Ventures. Mark Croskery of Stocks and Securities said investors should be cautious, since a similar trend occurred earlier this year when the stock rallied from $1.60to a high of $2.36.

According to Croskery, after the main buyer backed off, the stock returned to its $2 band.

"Basically, I think that stock is currently overextended or over-priced at current trading levels of $3.50 to $3.70 for technical and fundamental valuation reasons.

"Technically, the stock has one main buyer who is driving up the price, with Mayberry acting as broker, and the rest of market, has not been following and other buyers seem to be willing to buy at $2.60 to $2.90," said Croskery.

"One main buyer, which one can assume here, cannot support or drive a stock price forever."

Croskery predicts that, barring announcement of extraordinary news in the short term in terms of overseas deals, there will be a pullback in the price of SVL to about $2.60 to $2.90 "by early to mid-July."

ashford.meikle@gleanerjm.com