Trading the Philippine Stock Market

[techguys]

sayang wa ko kapalit ani nga stocks. sayangan sad ko sa MEG. huhuhu.

sege lang mag add ko ug capital next week.

Pahabol nako nga stock suggestions:

FGEN with target price of 14. Current price is 11.02. Potential upside is 27.04%
FPH with target price of 74.8. Current price is 60.4. Potential upside is 23.84%
And of course:
EDC with target price of 7.59. Current price is 4.89. Potential upside is 55.21%

Guys, please take note lang that EDC is owned by FGEN, and FGEN is owned by FPH, and FPH is part of LPZ. All of them essentially are Lopez owned companies, hehehe. So meaning, these are all correlated stocks so if you buy only Lopez stocks, please note that you incur huge risks from not diversifying your portfolio properly. Then again, we are all after the alpha so ---- why not! hahahaha.

[vondave]

@vondave, gi unsa nimo pagkuha ang target price for edc?

Bro, the target price is in the ATR Kim Eng reports that I get as email regularly. It's part of the brokerage service. So essentially bai, the target price is based on their analysts' fundamental analysis of the stocks using financial statements. I wish I could say I did the computations myself but really, it is best to leave that to the experts. I can tell you that I've been following ATR Kim Eng's recommendations for the past six months and proof that their reports are top quality are in the numbers I posted.

I wonder why gani I didn't follow their recommendations exclusively when I started with them 2 years ago, hehehe.

Anyway, below are relevant snippets from ATR on EDC stock. Check the report dates, and if you look at the charts, prices then of those stocks were cheap, in fact ninaog pa jud as predicted. Look at how high they've jumped recently. Maglaway jud mo, hehe. But really, it's bull run is only just starting bai. There is no clear uptrend pa gani, so if you get in now, you're in early. As for me, ga-ngisi na ko'g daho coz sayo kaayo ko:



ATR Kim Eng Report dated July 30, 2010
Utilities: EDC gears up for growth. Energy Development Corp|
| (EDC) is looking to expand its power generation capacity by| 38%
| over the next five years by investing as much as P20.6b in|
| capital expenditure. Except for the 150 MW Bacon-Manito|
| geothermal plant, the other power projects have not yet been|
| factored in our forecasts. If successful, these are bound to| expand
| the capacity of EDC thereby driving prospective revenue|
| growth. As such, we our keeping our BUY rating on EDC|
| although the prospects of falling earnings next year could put|
| some short-term pressure on its share price.


ATR Kim Eng Report dated July 13, 2010
We have lowered our profit forecasts on EDC by 15% to P7.98b in 2011
as the BacMan facility undergo rehabilitation resulting in higher costs.
While 15% lower YoY, this still represents an 8% improvement from
2009’s earnings of P7.38b. The improvement is mainly due to EDC’s
acquisition of the 192.5 MW Palinpinon and 112.5 MW Tongonan
geothermal power plants in October 2009.


Translated into US dollars, we estimate FGEN’s share of EDC’s recurring
earnings to fall 16% to US$67m in 2011. The trend, however, should
reverse the following year, with profits climbing 12% to US$75m in 2012
as the BacMan plant becomes fully operational by October 2012.


The incremental value derived from the shift in BacMan’s revenues to
electricity from purely steam sales should translate to even bigger profits
in 2013. Over the longer term, we calculate EDC’s DCF-NAV at
P7.59/share, 6% higher than our previous estimate. Using our revised
valuations on EDC, we likewise upgraded our fair value estimate on FGEN
by 6.7% to P18.84/share.

(guys, a later report downgrades FGEN's target price to 14 from 18.84, but still a good upside)

[vondave]

sayang wa ko kapalit ani nga stocks. sayangan sad ko sa MEG. huhuhu.

sege lang mag add ko ug capital next week.

I dropped my MEG months ago bai. It's currently on 'Hold' rating with ATR bai. I don't recommend that stock although I hold MEG warrants at 1 peso each, I can exercise those only in 2011, for sure by 2011, MEG will be between 1.5 and 2.5 siguro so sure money na ko.

Below is relevant report, I hope I am not violating any confidentiality agreements by reposting report snippets. In any case, I am fully crediting my broker:

ATR Kim Eng report dated August 13, 2010:
> Megaworld Corp (MEG) managed to keep pace with our earnings forecast
> as it registered 1H10 earnings of P2.21b, 10.5% YoY and accounted for
> 50.7% of our full-year estimates. We are inclined to keep our numbers
> but maintain our HOLD rating.
>
> Revenue growth weighed down by falling real estate sales Overall
> revenues grew 5.5% to P8.65b in 1H10, indicating that growth
> decelerated to 3.3% in 2Q10. This came with the 3.7% QoQ decline in
> real estate sales during the quarter thereby keeping the 1H10 real estate sales
> growth relative flat. While gross margin on its residential business
> improved more than 200 bps YoY to 32.1% in 1H10, the interim results
> also indicated that the figure has fallen QoQ to 30.8% in 2Q10 from
> 33.5% in 1Q01.
>
> Rental business remains the sole bright point Rental income helped
> save the day as it grew 36% Yoy in 1H10 and 45% YoY in 2Q10 owing
> to the strong takeup in the company’s leasable BPO office
> space. Unfortunately, despite the remarkable growth, rental income
> accounted for just 14.8% of gross revenues. Just the same, the
> growing contribution of rental income helped shore up operating
> margins to 31.6% in 1H10 from 28.5% a year earlier.
>
> HOLD rating stays
> In the meantime, MEG’s share price has risen 17% YTD and now trades
> at a 17% premium to our target price of P1.45. We find the
> premium to be unmerited given the sustained lackluster growth in
> real estate revenues that could elicit concerns on the stock and
> render it vulnerable to profit taking. Pending more details on
> the results, we are keeping our HOLD rating for now.
>
> No need to recast numbers
> We have no reason to revise our numbers at this point. On the
> contrary, we are even concerned that residential real estate sales
> have not kept pace with the 28% YoY rise in presales in 1Q10. The
> tepid growth in real estate sales can take toll on prospective
> earnings momentum given that the residential development segment
> still account for the bulk of MEG’s revenues. As it is, EPS
> growth is already weighed down by the significant share dilution resulting from the company’s rights issue.

Good luck everyone.

[techguys]

^ ka nice gud ani. daghan na ta reference.

[MoD]

^ ka nice gud ani. daghan na ta reference.

hehe.. daghan na jud.. with the help of bro ep and vondave and inno.. dako kaayo tabang sa mga newbies like me.. capital ra kulang.. lol

[techguys]

Mga Guys,

I read on the products sa COL ba ganina. Mura na interest ko ani nga paagi sa pag invest "peso cost averaging" kung mahal ang stocks gamay ra imo ma palit unya kung barato ang stocks daghan ka mapalit. maayo ani timingon lang nato nga barato ang stocks inig pirme palit nato.

minimum risk daw unya maximizing your return.

mura mao sad ni gitudlo ni Mr Boo sanchez sa iya house helper.

any advice mga guys kung unsa ang advantage ani ug unsa sad ang dis-advantage.

ang ako nakita problema ani kay kinahanglan man long term investment, unsa kaha nga mga stocks nga solid ang foundation nga pang 2 years or more para mao ato paliton?

thanks in advance.

[vondave]

Mao jud. Along with AC and MEG.. Nanglupad na.
A nice start of BER months.

Just checked. Ya bitaw. Nice ang AC. MEG also, although not sure kung sustainable ba ang MEG.

Is this an early start to the Santa Claus rally? hehehe.

[vondave]

Mga Guys,

I read on the products sa COL ba ganina. Mura na interest ko ani nga paagi sa pag invest "peso cost averaging" kung mahal ang stocks gamay ra imo ma palit unya kung barato ang stocks daghan ka mapalit. maayo ani timingon lang nato nga barato ang stocks inig pirme palit nato.

minimum risk daw unya maximizing your return.

mura mao sad ni gitudlo ni Mr Boo sanchez sa iya house helper.

any advice mga guys kung unsa ang advantage ani ug unsa sad ang dis-advantage.

ang ako nakita problema ani kay kinahanglan man long term investment, unsa kaha nga mga stocks nga solid ang foundation nga pang 2 years or more para mao ato paliton?

thanks in advance.

Techguys,

Yes, this is a great product. Scientific jud ni siya nga approach. In the US, they call this DCA. But please note lang that if you plan to deposit every month nga around 3k or less, then you won't really be buying more of a stock when they are cheap and less when they are expensive, coz at 3k or less, gamay ra kaayo imo options because of stock prices and board lot restrictions. DCA works best kung dako imo regular investment lumps. But in principle, sakto jud ni siya. In practice, lisud lang pag implement effectively.

My suggestion is to discipline yourself to invest regularly, period. Whether you use DCA or you just deposit manually to your trading account and choose stocks yourself, you'll enjoy the benefits of growth jud, guaranteed especially kung time frame nimo is longer than 10 or 15 years. Stocks are the top asset class jud for paper assets. This is proven historically across all markets and economies.

I do the latter bai. I deposit regularly to my trading account but I build my portfolio and constantly rebalance it myself. I refer to valuation reports from my broker. And, like what DCA does for you automatically by design, I intentionally buy more stocks when they are cheap and none when there are strong rallies, like today.

Here's a tip that really works bai based on my experience. When the market has bull rallies and everyone is excited, don't buy stocks at all. Pasagdi lang na sila magkiat diha. You might even consider selling your mature stocks when rallies happen. Only buy stocks when everyone is scared of the market, like when there's been a series of bearish days, like last week or when bad things happen, like after the Quirino hostage event. Stocks prices go down so look for good value stocks that are on bargain. That's the best time to buy, when stocks are on bargain sale. Then wait.

This takes patience bai, coz when you have extra money, you will always be tempted to buy a stock, any stock at all. Wrong approach. Keep it in cash and wait for the right time to buy. Diskarte jud ka dapat.

Good luck bai.

[techguys]

thanks vondave, depende lang gyud na sa ato diskarte. pero sa mga beginners like me. gamit lang usa ko ani nga idea. magdeposit ko every month unya mamili ko stocks which is cheaper compared sa iya fair value unya good potential to up.

Techguys,

Yes, this is a great product. Scientific jud ni siya nga approach. In the US, they call this DCA. But please note lang that if you plan to deposit every month nga around 3k or less, then you won't really be buying more of a stock when they are cheap and less when they are expensive, coz at 3k or less, gamay ra kaayo imo options because of stock prices and board lot restrictions. DCA works best kung dako imo regular investment lumps. But in principle, sakto jud ni siya. In practice, lisud lang pag implement effectively.

My suggestion is to discipline yourself to invest regularly, period. Whether you use DCA or you just deposit manually to your trading account and choose stocks yourself, you'll enjoy the benefits of growth jud, guaranteed especially kung time frame nimo is longer than 10 or 15 years. Stocks are the top asset class jud for paper assets. This is proven historically across all markets and economies.

I do the latter bai. I deposit regularly to my trading account but I build my portfolio and constantly rebalance it myself. I refer to valuation reports from my broker. And, like what DCA does for you automatically by design, I intentionally buy more stocks when they are cheap and none when there are strong rallies, like today.

Here's a tip that really works bai based on my experience. When the market has bull rallies and everyone is excited, don't buy stocks at all. Pasagdi lang na sila magkiat diha. You might even consider selling your mature stocks when rallies happen. Only buy stocks when everyone is scared of the market, like when there's been a series of bearish days, like last week or when bad things happen, like after the Quirino hostage event. Stocks prices go down so look for good value stocks that are on bargain. That's the best time to buy, when stocks are on bargain sale. Then wait.

This takes patience bai, coz when you have extra money, you will always be tempted to buy a stock, any stock at all. Wrong approach. Keep it in cash and wait for the right time to buy. Diskarte jud ka dapat.

Good luck bai.

[techguys]

@ EP and Vondave,

bullish gains lagi mo pareho sa april unya bearish sa august. mao ba gyud na siyay trending every year?

IMHO, pag-april kay e reveal ang company earnings and dividends. sakto ba ko?