Seprod Limited’s proposed five-for-one stock split has revived a recurring question on the Jamaica Stock Exchange: why some of its largest companies still trade with fewer than a billion shares while peers carry several billion.

GraceKennedy is the most prominent case. The food and financial services group has about 987 million shares in issue, according to Morningstar, and its stock has traded in a range of roughly $67 to $74 over the past year. 

GraceKennedy’s stock is undervalued. It should easily be in the $120 range. The conglomerate founded in Jamaica has resisted calls from individual shareholders to split its stock for more than a decade.

That account needs a qualifier. Grace Kennedy last split its shares in 2016, a three-for-one subdivision that lifted its authorised capital from 400 million to 1.2 billion shares. The stock was near $118 when the plan was announced, and then chief executive Don Wehby said the split would make the stock available to more investors. 

On a per-unit basis, the gap with peers is wide. Wisynco Group has about 3.8 billion shares and Lasco Manufacturing about 4.15 billion.. Wisynco recently traded near $20. Seprod, with 910.9 million shares priced around $72 before this week’s rally, sits much closer to GraceKennedy.

A split does not change what a company is worth. It cuts the price of each unit and multiplies the number of units, leaving every holder’s percentage stake intact. The argument for splitting rests on access: a lower unit price lets small investors buy meaningful lots with less cash, which can widen the shareholder base and raise the number of trades.

Unit volume can mislead. GraceKennedy’s average daily volume  is at about 33,000 shares, roughly $2.3 million at recent prices. Wisynco’s three-month average was about 126,000 units, or around $2.5 million at $20 a share.  On those numbers, the two stocks trade similar dollar values each day despite a near fourfold difference in units. 

Ownership matters as much as price. Institutions held close to 78 per cent of Wisynco’s shares, which limits free float, whatever the unit price. GraceKennedy’s top 25 shareholders held about 32.5 per cent. 

GraceKennedy’s own experience after 2016 was mixed. About a month after that split took effect, a single block of 27.9 million shares worth more than $1.1 billion changed hands, the stock’s biggest session in years. Few shareholders held enough stock to deal in that size, pointing to institutional rather than retail activity. 

The share price has also trailed the business. Simply Wall St data shows GraceKennedy stock falling about 3 per cent a year over three years while earnings per share held flat. The group grew 2025 revenue 6.4 per cent to $177.8 billion, though pre-tax profit fell to $10.3 billion from $12.3 billion after Hurricane Melissa.

While Seprod has opted for a stock split, GraceKennedy has gone the buyback route. A share buyback uses company cash to reduce the total number of shares on the market while a stock split divides existing shares to increase the total number available without changing market value.

Apple has split its stock five times since going public in 1980. 

GraceKennedy, under the leadership of Don Wehby back in 2023 launched a share buyback programme to enhance shareholder value and boost earnings. Why? Because its stock continued to trade below its value.

Both Don Wehby and his successor Frank James have said the equity in the Group is undervalued by the wider market. The initial aim was to repurchase up to 1 per cent of the Group’s shares in issue.

In 2023, Wehby said: “We are confident on our long-term strategy and believe that investing in our own company is the best use of capital and a good investment for long-term returns.

“The proposed share buyback is being implemented because the company’s share price is considered to be below its true value and is an opportunity to enhance shareholder value by helping to raise earnings per share.” 

What Don Wehby had to say in his assessment of the operating environment back then is eerily similar to what the Group is experiencing now.

Wehby said: “ Rising inflation, an inconsistent supply chain, increasing interest rates and distribution costs together with geopolitical conflicts were compounded by the movement of currencies in our main operating markets in 2022 and these factors negatively impacted our business performance.” 

 Seprod shareholders vote on their split at an extraordinary general meeting on October 12.