After trying our best to withstand the sell off of the stock markets in other countries, our local index succumbed to the pressure. It comes as no surprise because as the cliche goes, no man (or stock market) is an island, even if you're an archipelago.
Investors and traders who witnessed the bloodbath in 2008 must be saying to themselves, "eto nanaman tayo" (here we go again).
Well, not exactly.
My opinion is that the government interventions made in 2009 paved the way for extra money to flow into the markets - whether in equities, minerals, etc. Now that uncertainty is back, the big players may be liquidating their positions, preferring to stay put in cash, hence the sell off.
Further, what's different is that governments worldwide have already used quite a bit of arsenal already. Injecting loads of money into their economies to stave off individual recessions in 2009.
So now, if governments can't do anything else, everybody's wondering if there's going to be a double dip.
And we're not talking about Oreos here.
What's left to do? Perhaps it's time to let the markets play out on its own.
Certainly, governments are scrambling to find ways to mitigate the crisis. What's an investor to do? Wait and see or do like Buffett - but when everybody's selling.
Stocks are usually forward looking, so the crash lately could mean economic hard times in the next few months.
Time to tighten your belt? Perhaps.
You wouldn't be hard pressed if you were able to set an emergency fund first before plunking hard earned money on real estate, stocks, bonds, or managed funds.
People have this notion that the best way to grow their money is to invest it right away.
That's not entirely correct. Before you decide on your investment instruments, you should set aside an emergency or savings fund.
An emergency fund represents 3-4 months of your monthly expenses. However, if you would like to be on the safe side, instead of expenses, use your monthly salary as your guide.
*********************************
LBC Bank recently closed shop. According to the news report, the reason is attributable to them offering higher interest rates than their peers.
As you know, if a deal sounds too good to be true, it probably is.
During financial crises, poorly managed financial institutions fold up.
The last time that happened locally, it was during the height of the US financial crisis.
Remember Legacy?
********************************
I'm elated that some of the stocks I was talking about last year went up substantially, namely GLO and ORE. My mistake was with MPI (I will have to uncover why it is underperforming).
Until then, appreciate the (heightened) risk, then appreciate the capital!
*** Blogger is a lousy blog service. Truly. I had a long text and it just disappeared. I hope to use a more reliable service in the future. Sorry I just had to say it. ***
Showing posts with label Guerilla Investing Stock Focus. Show all posts
Showing posts with label Guerilla Investing Stock Focus. Show all posts
Thursday, September 22, 2011
Thursday, September 8, 2011
Market Mover?
The mining superstar, or, at least one of the superstars, Lepanto Mining, saw its shares drop from a high of 1.82 last August 24 to a low of 1.28 today ("A" shares).
What is disturbing is the volume of transaction in the past few days, especially when the stock saw heavy selling.
What's happening? Well, basically there are two rumors daw. I say daw because that's what I heard. So it's up to you if you want to take it with a grain of salt. First is that the company is looking at doing a stock right. Second, there will be a postponement of the announcement to be made by their foreign investor Gold Fields.
Then of course, there's that unloading of LC shares because it's not part of the PSEi anymore. This is a fact. So index funds need to unload their LC to mimic the composition of the PSEi.
What happened in the past few days of course, forces traders to rethink their positions in LC. Today's recovery may just be a dead cat bounce. Investors, on the other hand, who truly believe that LC will become a profitable company one day may want to forget what has happened and just look to the future. Easy to say, I am sure.
There was also a columnist in the Inquirer who said that "According to unverified reports, the company is slated for a secondary offering—a development that could only be interpreted to mean that the principals of the company are taking their profits which, in turn, may send the message that no further initiatives are at hand to assure the continued growth of the company."
In my young experience with the stock market, stock rights usually negatively weigh on the shares of the company. It will take some time for its stock price to go up - - should it happen.
His article came out Monday. LC had a bloodbath the following days. Market mover?
Nah. Most likely it's the moves made by fund managers in anticipation of the Sept 12 shake up of the index. LC is being removed by then. If you're an index mutual fund with loads of LC, you can't sell those shares in just one day. I'm sure it is spread over numerous days.
San Miguel and Semirara will join the index, along with others who'll replace those that'll be exiting.
*******************************
It's interesting and also an encouraging sign to note that more and more Filipinos are looking for ways to build wealth (not just spend wealth). This is why paper investments have increased as well as hard assets like condominiums. The next logical step will be to have even more forms of paper investments and an increase in home equity loans.
When you buy property, you can actually increase your net worth right away by taking out a home equity loan. Unfortunately though, this money is fake money because it's not yours. I use the word fake loosely, of course.
Americans used this fake money to buy goods they didn't need. Look at what happened to their economy now.
The continued launch of new projects is sure to increase property prices. Because logically, you can't sell new projects at a cheaper price right? For one, prices of construction materials will go up as construction demand goes up. Further, the developer can't price its new projects lower than their old projects because that will be saying that their old projects are overvalued. They will also risk the ire of their investors.
Property, while generally safe, is not immune to price activity. Prices do not fall on a straight line upwards. Time will come that it will plateau, or, actually go down.
I'm sure property advocates will not agree with me. hehe.
But ponder on this, if stocks are priced based on earnings, what or who determines the price of a property? The developer or the market? Ultimately it will be the market. So when the market is riddled with sellers, like the stock market, prices will go down.
Anyway, that's it for now.
Until then, appreciate the risk, then appreciate the capital!
What is disturbing is the volume of transaction in the past few days, especially when the stock saw heavy selling.
What's happening? Well, basically there are two rumors daw. I say daw because that's what I heard. So it's up to you if you want to take it with a grain of salt. First is that the company is looking at doing a stock right. Second, there will be a postponement of the announcement to be made by their foreign investor Gold Fields.
Then of course, there's that unloading of LC shares because it's not part of the PSEi anymore. This is a fact. So index funds need to unload their LC to mimic the composition of the PSEi.
What happened in the past few days of course, forces traders to rethink their positions in LC. Today's recovery may just be a dead cat bounce. Investors, on the other hand, who truly believe that LC will become a profitable company one day may want to forget what has happened and just look to the future. Easy to say, I am sure.
There was also a columnist in the Inquirer who said that "According to unverified reports, the company is slated for a secondary offering—a development that could only be interpreted to mean that the principals of the company are taking their profits which, in turn, may send the message that no further initiatives are at hand to assure the continued growth of the company."
In my young experience with the stock market, stock rights usually negatively weigh on the shares of the company. It will take some time for its stock price to go up - - should it happen.
His article came out Monday. LC had a bloodbath the following days. Market mover?
Nah. Most likely it's the moves made by fund managers in anticipation of the Sept 12 shake up of the index. LC is being removed by then. If you're an index mutual fund with loads of LC, you can't sell those shares in just one day. I'm sure it is spread over numerous days.
San Miguel and Semirara will join the index, along with others who'll replace those that'll be exiting.
*******************************
It's interesting and also an encouraging sign to note that more and more Filipinos are looking for ways to build wealth (not just spend wealth). This is why paper investments have increased as well as hard assets like condominiums. The next logical step will be to have even more forms of paper investments and an increase in home equity loans.
When you buy property, you can actually increase your net worth right away by taking out a home equity loan. Unfortunately though, this money is fake money because it's not yours. I use the word fake loosely, of course.
Americans used this fake money to buy goods they didn't need. Look at what happened to their economy now.
The continued launch of new projects is sure to increase property prices. Because logically, you can't sell new projects at a cheaper price right? For one, prices of construction materials will go up as construction demand goes up. Further, the developer can't price its new projects lower than their old projects because that will be saying that their old projects are overvalued. They will also risk the ire of their investors.
Property, while generally safe, is not immune to price activity. Prices do not fall on a straight line upwards. Time will come that it will plateau, or, actually go down.
I'm sure property advocates will not agree with me. hehe.
But ponder on this, if stocks are priced based on earnings, what or who determines the price of a property? The developer or the market? Ultimately it will be the market. So when the market is riddled with sellers, like the stock market, prices will go down.
Anyway, that's it for now.
Until then, appreciate the risk, then appreciate the capital!
Thursday, May 5, 2011
SMC, sleep muna corporation
I've been so out of touch with the local stock market and more so with my blog for quite some time. There were some opportunities in the stock market but slowly, I am realizing that if you don't have the time, you just entrust your money to fund managers via mutual funds.
However, greed is preventing me from going the route of investing in mutual funds. Hehe.
I know I've got lots of things and ideas I'd like to share about personal finance; unfortunately, as I've come to realize, interest and time is usually inversely proportional.
On top of this, when I started this blog, I failed to plan ahead. I didn't come up with a list of topics to talk about. So there were periods of drought, as was the previous month/s. I hope that stops.
I've been out of touch that I didn't know (nor feel) the secondary offering of SMC. Prior to its closing, it was trading between 150 to 170. Since it was offered at only 110, it closed down today at 109.50. At one point it was at the low of 105.70. I do have faith that the share price will make a strong rebound; but, it will take some time, given the volume of shares that just made a tsunami in the market.
I also had plans of taking positions in LC (Lepanto, a mining stock) with the strategy of buying and forgetting all about it. I just didn't do it yet due to one, lack of funds hehe; and, two, I'm waiting for a good entry point (will I still get it?). I'm hoping it would.
I fear of recommending anything for the mere fact that I have not been actively monitoring stocks for some time now. Couple that with the lack of a good charting software, I'd be wary of touching anything that I don't plan on holding for a long time. So basura stocks, it may be time to say good bye and not good buy.
It's funny, during the first quarter, I was waiting for the market to rebound. Now, I'm waiting for the market to correct. Every time I'm about to make a decision, the market isn't cooperating. Mutual funds, here I come?
If there's anything I'd like to impart, investing in mutual funds is the easiest boring way to earn passive income.
See you soon and do constantly drop by. I hope your patience doesn't wear thin. =p
However, greed is preventing me from going the route of investing in mutual funds. Hehe.
I know I've got lots of things and ideas I'd like to share about personal finance; unfortunately, as I've come to realize, interest and time is usually inversely proportional.
On top of this, when I started this blog, I failed to plan ahead. I didn't come up with a list of topics to talk about. So there were periods of drought, as was the previous month/s. I hope that stops.
I've been out of touch that I didn't know (nor feel) the secondary offering of SMC. Prior to its closing, it was trading between 150 to 170. Since it was offered at only 110, it closed down today at 109.50. At one point it was at the low of 105.70. I do have faith that the share price will make a strong rebound; but, it will take some time, given the volume of shares that just made a tsunami in the market.
I also had plans of taking positions in LC (Lepanto, a mining stock) with the strategy of buying and forgetting all about it. I just didn't do it yet due to one, lack of funds hehe; and, two, I'm waiting for a good entry point (will I still get it?). I'm hoping it would.
I fear of recommending anything for the mere fact that I have not been actively monitoring stocks for some time now. Couple that with the lack of a good charting software, I'd be wary of touching anything that I don't plan on holding for a long time. So basura stocks, it may be time to say good bye and not good buy.
It's funny, during the first quarter, I was waiting for the market to rebound. Now, I'm waiting for the market to correct. Every time I'm about to make a decision, the market isn't cooperating. Mutual funds, here I come?
If there's anything I'd like to impart, investing in mutual funds is the easiest boring way to earn passive income.
See you soon and do constantly drop by. I hope your patience doesn't wear thin. =p
Saturday, February 19, 2011
State of the Stock Market
Surprise, surprise.
It's either I wasn't any much interested in the local stock market anymore; or, I was just plain busy these days that I didn't notice that Megawide (Ticker MWIDE) listed just this Friday (Feb 18).
Or.... I just didn't have the funds.
Not that I lost a big opportunity anyways, as the title of the news article in PDI online says -
"Megawide lists stocks, closes at IPO price of P7.84/share "
It closed at the IPO price??
Even the fact that the owners of MEGAMall, i.e. the Sy family, buying a chunk of the shares did little to up its IPO performance.
If memory serves me right, the same thing happened with the listing of Anchor Land in 2007 I think. The IPO was lackluster even though the Sys bought a stake prior to its listing.
Oh well, as they say, history does repeat itself in the stock market.
Speaking of repeating itself, I remember during my class in RFP, Mr Efren Cruz did mention that stock markets are on its peak if there are many IPOs.
While I don't consider the recent IPOs as that many compared to 2006-7, it does mean that the conditions in the stock market have been ripe and, to quote an often used phrase of stock market analysts, "valuations are good". Or, in layman's terms, people are willing to part with higher amounts of money so the corporation gets more funds per share.
It also means that when the stock market is on its peak, it will be a prelude to a market correction. So, history is repeating itself. The key difference though is that the correction may not be as dragging as it was in 2008.
On hindsight, the correction set the stage for a banner year in the local stock market in 2009-10.
So will the second half of 2011 be like that? Hopefully...
To continue, since the conditions have worsened recently, Filinvest Development Corp deferred their planned secondary offering with no commitment date. San Miguel Corp. also deferred their plans, but said it would be sometime March.
Pertinent text from the news item -
Start quote
Well. Even mighty SMC succumbed to the mightier stock market.
If I were you, I think it's best to take a vacation and just re-evaluate the stock market come second quarter.
My only hope is that the market doesn't sink lower; and, the BSP be clear whether or not they will raise interest rates, inflation will indeed go up.
I mean the taxi meter already started inching up. Others (food prices, toll, etc you name it) may soon follow suit.
Abangan.
It's either I wasn't any much interested in the local stock market anymore; or, I was just plain busy these days that I didn't notice that Megawide (Ticker MWIDE) listed just this Friday (Feb 18).
Or.... I just didn't have the funds.
Not that I lost a big opportunity anyways, as the title of the news article in PDI online says -
"Megawide lists stocks, closes at IPO price of P7.84/share "
It closed at the IPO price??
Even the fact that the owners of MEGAMall, i.e. the Sy family, buying a chunk of the shares did little to up its IPO performance.
If memory serves me right, the same thing happened with the listing of Anchor Land in 2007 I think. The IPO was lackluster even though the Sys bought a stake prior to its listing.
Oh well, as they say, history does repeat itself in the stock market.
Speaking of repeating itself, I remember during my class in RFP, Mr Efren Cruz did mention that stock markets are on its peak if there are many IPOs.
While I don't consider the recent IPOs as that many compared to 2006-7, it does mean that the conditions in the stock market have been ripe and, to quote an often used phrase of stock market analysts, "valuations are good". Or, in layman's terms, people are willing to part with higher amounts of money so the corporation gets more funds per share.
It also means that when the stock market is on its peak, it will be a prelude to a market correction. So, history is repeating itself. The key difference though is that the correction may not be as dragging as it was in 2008.
On hindsight, the correction set the stage for a banner year in the local stock market in 2009-10.
So will the second half of 2011 be like that? Hopefully...
To continue, since the conditions have worsened recently, Filinvest Development Corp deferred their planned secondary offering with no commitment date. San Miguel Corp. also deferred their plans, but said it would be sometime March.
Pertinent text from the news item -
Start quote
SMC president Ramon S. Ang earlier said the company wants to proceed with the sale of as many as 1 billion common shares valued at P200 to P250 per share within the first quarter.
At the high end of that price guidance, the follow-on offer will be worth P250 billion, proceeds of which will be used to accelerate SMC’s diversification away from its traditional businesses of food and drinks into infrastructure and mining.
Market watchers agreed with the sale postponement, saying the company can fetch better values once the market settles down.
End quoteWell. Even mighty SMC succumbed to the mightier stock market.
If I were you, I think it's best to take a vacation and just re-evaluate the stock market come second quarter.
My only hope is that the market doesn't sink lower; and, the BSP be clear whether or not they will raise interest rates, inflation will indeed go up.
I mean the taxi meter already started inching up. Others (food prices, toll, etc you name it) may soon follow suit.
Abangan.
Tuesday, November 23, 2010
A penny for your thoughts, a nickel (asia) for a kiss (UPDATE)
Thanks for being patient, my dear readers. You guys are the reason why I keep coming back to post. Unfortunately the previous weeks were a mishmash of busyness and inability of my network provider to, well, provide my connection to the interweb. Inasmuch as I was busy then, the market has also been that way, there was a lot of action, including the long awaited (?) correction everybody was warning about.
I previously said that the next post would be a continuation of the IPO's, particularly on Nickel Asia. As fate would have it, the stock has already been listed on the board, passing by the time I should've and could've updated this blog. Anyway, it does make this post more interesting to write; and, hopefully more interesting for you to read also.
The offer price was in the lower end of the band, priced at 15 apiece. On its debut, the stock opened at 19, rose to 19.40 then went pft to close at 16.50. At the close, those who were lucky enough to get a chunk of the offering earned 10%. Not that bad considering that Cebu Pacific (Ticker CEB) opened at 132, to close at 133, with an offering price of 125, a gain of only 6%.
While the gain for CEB was quite modest at best, at least it still went up even though the offer price of CEB was at the high end of the price band.
NIKL had a price band of between 15 to 22. According to a broker friend, he said that pricing it at the lower end does not give a good impression. Think of it this way, if you were in an auction, and nobody was bidding up the art piece, then it means that people think the starting bid is already a good price.
On the other hand, setting the offer price at the lower end does give investors or investor-speculator-traders more upside, as proven by the 10-26% gain of NIKL compared to the 6% of CEB.
Now there's the IPO of IP Converge. The ticker will be CLOUD. While I do hope their IPO will point to the direction where clouds can be found, I do have my doubts. The local stock market is in a breather phase, and its parent company, IPVG, is not behaving as JGS did when CEB was about to list.
I checked the prospectus of CLOUD, IP holds 90% of its common shares. Price will be at 8.80. If you want to check out the prospectus, click here. It's 158 pages long, so you've been warned. Listing date is slated on December 9. Offer period is November 25 to December 2. Dividends were declared last Feb 3, but it's just at Php 5M or about Php .03 per 1 common share, if my vague remembrance and understanding of the definition of common and outstanding shares serves me right.
I hope with the above, you've had some basic info about the next IPO. IPO's are usually a way to make a quick buck. Unfortunately, making quick buck, at least in my opinion, is not about investing, it's more likely you're behaving like a speculator. So determine what you really are, before you partake of the IPO.
Nonetheless, there may be a speculative play in IP, I think. This will be similar to how ORE behaved because of NIKL. I was right with the ORE play, but I can't be right all the time. This is pure speculation. So again, buyer beware.
News came out recently that the IPO price of CLOUD has been reduced to 4.2, or half of the original price range. Here are the news take aways -
First paragraph -
MANILA, Philippines—Data services provider IP Converge Data Center Inc. (IPC), a unit of publicly listed technology IPVG Corp., has priced an initial public offering at P4.20 per share, cheaper than the earlier targeted price range.
You find the "incriminating" paragraph in the fourth paragraph -
The IPO was priced below the indicative range of P7.04 and P8.80 per share, seen to make the offering more attractive at this time that the stock market is undergoing a consolidation phase after retreating from all-time highs.
Key common sense questions to ask -
1. If you're confident with what you are selling, are you going to offer it for a bargain?
2. Why isn't IP moving up; or, at least showing some strength in the market? It seems the direction of the stock price has already "predicted" that this will be a lackluster IPO.
(I looked at the price chart of IP; and since October 26, it has not been doing anything but go down.)
Given this, IP may not provide the returns of an IPO play similar to JGS and ORE. I will however, review this stock in the days leading to the IPO of CLOUD. That's probably after December 2. Keeping my fingers crossed.
Until then, appreciate the risk, then appreciate the capital! In the meantime, why not read my previous posts? ;-)
By the way, closely monitor the tensions between the two Koreas. Geopolitical events often cast a shadow on stock markets. With this happening so close to home, stocks may either further correct or move sideways for some time. Buying opportunity? Perhaps, if you're an investor. But it's always good to stay liquid and wait for a better timing.
I previously said that the next post would be a continuation of the IPO's, particularly on Nickel Asia. As fate would have it, the stock has already been listed on the board, passing by the time I should've and could've updated this blog. Anyway, it does make this post more interesting to write; and, hopefully more interesting for you to read also.
The offer price was in the lower end of the band, priced at 15 apiece. On its debut, the stock opened at 19, rose to 19.40 then went pft to close at 16.50. At the close, those who were lucky enough to get a chunk of the offering earned 10%. Not that bad considering that Cebu Pacific (Ticker CEB) opened at 132, to close at 133, with an offering price of 125, a gain of only 6%.
While the gain for CEB was quite modest at best, at least it still went up even though the offer price of CEB was at the high end of the price band.
NIKL had a price band of between 15 to 22. According to a broker friend, he said that pricing it at the lower end does not give a good impression. Think of it this way, if you were in an auction, and nobody was bidding up the art piece, then it means that people think the starting bid is already a good price.
On the other hand, setting the offer price at the lower end does give investors or investor-speculator-traders more upside, as proven by the 10-26% gain of NIKL compared to the 6% of CEB.
Now there's the IPO of IP Converge. The ticker will be CLOUD. While I do hope their IPO will point to the direction where clouds can be found, I do have my doubts. The local stock market is in a breather phase, and its parent company, IPVG, is not behaving as JGS did when CEB was about to list.
I checked the prospectus of CLOUD, IP holds 90% of its common shares. Price will be at 8.80. If you want to check out the prospectus, click here. It's 158 pages long, so you've been warned. Listing date is slated on December 9. Offer period is November 25 to December 2. Dividends were declared last Feb 3, but it's just at Php 5M or about Php .03 per 1 common share, if my vague remembrance and understanding of the definition of common and outstanding shares serves me right.
I hope with the above, you've had some basic info about the next IPO. IPO's are usually a way to make a quick buck. Unfortunately, making quick buck, at least in my opinion, is not about investing, it's more likely you're behaving like a speculator. So determine what you really are, before you partake of the IPO.
Nonetheless, there may be a speculative play in IP, I think. This will be similar to how ORE behaved because of NIKL. I was right with the ORE play, but I can't be right all the time. This is pure speculation. So again, buyer beware.
News came out recently that the IPO price of CLOUD has been reduced to 4.2, or half of the original price range. Here are the news take aways -
First paragraph -
MANILA, Philippines—Data services provider IP Converge Data Center Inc. (IPC), a unit of publicly listed technology IPVG Corp., has priced an initial public offering at P4.20 per share, cheaper than the earlier targeted price range.
You find the "incriminating" paragraph in the fourth paragraph -
The IPO was priced below the indicative range of P7.04 and P8.80 per share, seen to make the offering more attractive at this time that the stock market is undergoing a consolidation phase after retreating from all-time highs.
Key common sense questions to ask -
1. If you're confident with what you are selling, are you going to offer it for a bargain?
2. Why isn't IP moving up; or, at least showing some strength in the market? It seems the direction of the stock price has already "predicted" that this will be a lackluster IPO.
(I looked at the price chart of IP; and since October 26, it has not been doing anything but go down.)
Given this, IP may not provide the returns of an IPO play similar to JGS and ORE. I will however, review this stock in the days leading to the IPO of CLOUD. That's probably after December 2. Keeping my fingers crossed.
Until then, appreciate the risk, then appreciate the capital! In the meantime, why not read my previous posts? ;-)
By the way, closely monitor the tensions between the two Koreas. Geopolitical events often cast a shadow on stock markets. With this happening so close to home, stocks may either further correct or move sideways for some time. Buying opportunity? Perhaps, if you're an investor. But it's always good to stay liquid and wait for a better timing.
Thursday, October 28, 2010
IPOze
Last post I left with a teaser on ORE, a mining stock.
I don't have any information about the stock except that - from the grapevine (mostly online forum/s) - it has the highest grade nickel in the country.
Well, common sense dictates that if you have the highest grade of something, you get better prices for your goods. And, when you get better prices, that means you get better revenues, ladies and gentlemen.
Recently, by coincidence, there was a news release in the Inquirer (website), just this October 26, entitled "First nickel shipment eyed by December". For your ease, the meat of the news is found in these paragraphs -
The mining unit of publicly-listed Oriental Peninsula Resources Group Inc. (ORE) is scheduled to deliver its first shipment of high-grade nickel ore to Japan and Australia by December 2010.
ORE chairman and president Caroline Tanchay said ORE’s subsidiary Citinickel Mines has been operating since August. “If not for the heavy rains in Palawan, Citinickel could have produced more. However, I’m glad we can finally ship out high grade nickel ore which is good news for our shareholders,” Tanchay said.
The scheduled shipment follows the signing and submission before the Regional Trial Court last August of a compromise settlement that puts an end to the long running dispute between Citinickel and erstwhile rival Platinum Group Metals Corp. (PGMC).
Good news indeed? So far, this hasn't been a "sell on news" story.
Well, let's review the price action since my last post.
Oct 20: Open 3.28, High of 3.48, Close 3.40
Oct 26: Open 3.49, High of 3.69, Close 3.61
Oct 27: Open 3.70, High of 3.74, Close 3.65
Oct 28: Open 3.65, High of 3.70, Close 3.60
Notice anything?
What's the spread of October 26 and 20? 20 centavo run from the open to the high, then an 8 centavo retracement from the high to the close.
Then there's the .11 difference in the opening prices of Oct 20, 26, and 27.
The spread though on October 27 and 28 had been thinning. The closing price today suggests a bearish trend for the stock given the lower close vs. October 27's 3.70 opening price.
Prices don't lie. Then again, perhaps I'm just over-analyzing.
Even with the possible bearish trend of ORE, it may enjoy buoyancy in the coming days as Nickel Asia is listed through an IPO. I looked at the prospectus and my it's hundred pages. I suggest you also do your research. The link I put here has another link to their website and provides some legalese that's best read by you.
I remember though that there was a summary version of this and I was particularly interested with the item on dividends policy. I skimmed through the (new) hundred page document and found this instead -
"Upon completion of the Offer, our dividend policy entitles holders of Shares to receive annual cash dividends of up to 30% of the prior year’s recurring attributable net income based
on the recommendation of our Board of Directors. Such recommendation will take into consideration factors such as dividend income from subsidiaries, debt service requirements,
the implementation of business plans, operating expenses, budgets, funding for new investments and acquisitions, appropriate reserves and working capital, among others. See
“Dividends and Dividend Policy”."
Portion of the "Dividends and Dividend Policy"
"We paid cash dividends to our shareholders in 2007 and 2009 in the amounts of 81,611 million and 8142.2 million, respectively, and paid a 150,000,000 share common stock dividend in September 2010.
We did not pay dividends in 2008 because we were conserving our cash in anticipation of making an equity contribution in respect of the Taganito HPAL facility project. On August 13, 2010, our Board of Directors declared a cash dividend equal to the peso equivalent of US$70 million, which is scheduled to be paid no later than three days following the listing of the Offer Shares on the PSE to shareholders of record on August 31, 2010."
I cannot say with confidence and certainty that the CEBU PACIFIC IPO Prospectus contained no such information as I didn't bother to read it. I just happened to view the Nickel Asia prospectus recently so I wanted to learn more about their upcoming offering.
The IPO of Nickel Asia will spur interest in stocks that are in to the nickel business. This means ORE will attract attention, in my opinion. So, there may be trading opportunities for ORE even with the possible bearish move.
Anyway, that's it for now. To be continued in the next post. Until then, appreciate the risk, then appreciate the capital!
I don't have any information about the stock except that - from the grapevine (mostly online forum/s) - it has the highest grade nickel in the country.
Well, common sense dictates that if you have the highest grade of something, you get better prices for your goods. And, when you get better prices, that means you get better revenues, ladies and gentlemen.
Recently, by coincidence, there was a news release in the Inquirer (website), just this October 26, entitled "First nickel shipment eyed by December". For your ease, the meat of the news is found in these paragraphs -
The mining unit of publicly-listed Oriental Peninsula Resources Group Inc. (ORE) is scheduled to deliver its first shipment of high-grade nickel ore to Japan and Australia by December 2010.
ORE chairman and president Caroline Tanchay said ORE’s subsidiary Citinickel Mines has been operating since August. “If not for the heavy rains in Palawan, Citinickel could have produced more. However, I’m glad we can finally ship out high grade nickel ore which is good news for our shareholders,” Tanchay said.
The scheduled shipment follows the signing and submission before the Regional Trial Court last August of a compromise settlement that puts an end to the long running dispute between Citinickel and erstwhile rival Platinum Group Metals Corp. (PGMC).
Good news indeed? So far, this hasn't been a "sell on news" story.
Well, let's review the price action since my last post.
Oct 20: Open 3.28, High of 3.48, Close 3.40
Oct 26: Open 3.49, High of 3.69, Close 3.61
Oct 27: Open 3.70, High of 3.74, Close 3.65
Oct 28: Open 3.65, High of 3.70, Close 3.60
Notice anything?
What's the spread of October 26 and 20? 20 centavo run from the open to the high, then an 8 centavo retracement from the high to the close.
Then there's the .11 difference in the opening prices of Oct 20, 26, and 27.
The spread though on October 27 and 28 had been thinning. The closing price today suggests a bearish trend for the stock given the lower close vs. October 27's 3.70 opening price.
Prices don't lie. Then again, perhaps I'm just over-analyzing.
Even with the possible bearish trend of ORE, it may enjoy buoyancy in the coming days as Nickel Asia is listed through an IPO. I looked at the prospectus and my it's hundred pages. I suggest you also do your research. The link I put here has another link to their website and provides some legalese that's best read by you.
I remember though that there was a summary version of this and I was particularly interested with the item on dividends policy. I skimmed through the (new) hundred page document and found this instead -
"Upon completion of the Offer, our dividend policy entitles holders of Shares to receive annual cash dividends of up to 30% of the prior year’s recurring attributable net income based
on the recommendation of our Board of Directors. Such recommendation will take into consideration factors such as dividend income from subsidiaries, debt service requirements,
the implementation of business plans, operating expenses, budgets, funding for new investments and acquisitions, appropriate reserves and working capital, among others. See
“Dividends and Dividend Policy”."
Portion of the "Dividends and Dividend Policy"
"We paid cash dividends to our shareholders in 2007 and 2009 in the amounts of 81,611 million and 8142.2 million, respectively, and paid a 150,000,000 share common stock dividend in September 2010.
We did not pay dividends in 2008 because we were conserving our cash in anticipation of making an equity contribution in respect of the Taganito HPAL facility project. On August 13, 2010, our Board of Directors declared a cash dividend equal to the peso equivalent of US$70 million, which is scheduled to be paid no later than three days following the listing of the Offer Shares on the PSE to shareholders of record on August 31, 2010."
I cannot say with confidence and certainty that the CEBU PACIFIC IPO Prospectus contained no such information as I didn't bother to read it. I just happened to view the Nickel Asia prospectus recently so I wanted to learn more about their upcoming offering.
The IPO of Nickel Asia will spur interest in stocks that are in to the nickel business. This means ORE will attract attention, in my opinion. So, there may be trading opportunities for ORE even with the possible bearish move.
Anyway, that's it for now. To be continued in the next post. Until then, appreciate the risk, then appreciate the capital!
Wednesday, October 20, 2010
Mine's Here!
Dear readers, thank you for being patient. As promised last week, I am back with a new post. I'll just make some stock market commentaries, a short review of my stock trade forecast, and another long term stock you may wish to add to your portfolio.
I hope stock market enthusiasts have made money in the recent weeks. For the others who don't know or care about the stock market, maybe it's about time you did. I'm not surprised that most haven't.
Continue stocking up on the stock market...
Based on this news piece from the Inquirer,
"THE Philippine Stock Exchange estimates that less than 1 percent of the Philippine population invest in the stock market, but exactly how many people are we talking about?
Based on the latest headcount, that figure may be about 400,000—slightly less than the holiday foot traffic at SM’s most populous malls. This number covers the active retail investors, defined conservatively as those who trade at least once a year.
By demographics, local stock market investors usually are aged 30 to 50, majority of whom are male. About 35 percent of them are Chinoys, according to the PSE. "
And, if you're worried that maybe it's too late to enter the stock market, perhaps the last paragraph of Dean Somera's post would calm your nerves. If you don't want to go to the link anymore, basically this is the meat of the entire article -
"With the oversubscription of the CEB IPO and very positive public reaction to the SMDC SRO, market outlook is encouraging. And, if the market bulletin of one stockbrokerage house is correct when it said that current “foreign participation is only about P50 billion monthly versus the P100 billion monthly in the 2007 rally,” it seems that there are more money available to bolster current market momentum and direction."
With regards the CEB IPO, according to a news article in Inquirer, the local portion of the offering were "all sold". Some more "praise release", I suppose -
"This will be the largest IPO by a low-cost carrier in the Asia-Pacific to date. Its parent firm JG Summit expects to raise as much as P23.3 billion ($539 million), without having to exercise an option to sell even more shares.
The IPO is one of the largest ever conducted in the Philippines, and the largest Philippine IPO in US dollar terms."
Now, the question is, what will these IPO takers do on listing date? Sell the shares for a quick buck or hold it for the long term? My oh my, Php 23 Billion, then there's that transaction between Mang Inasal and Jollibee worth Php 3 Billion. These piles of cash should go somewhere!
I sure hope I get to be the kind of entrepreneur Mr. Sia is.
Reviewing my recommendations...
These recommendations were made September 24.
1. Atlas doing a correction - I was right. What I was wrong with was that after the correction, it went even higher to hit 18.32. Then again, I did say that,
"But if you're no expert (like me), you might as well just hold on to it as long as you've padded that many profits since you bought it at 10.50."
2. DGTL - I was right that you should not choose DGTL. This stock tanked after a gap up...
3. APC - And I was wrong with APC, as it also tanked on Monday, September 27. It opened higher than the Friday's close only to close lower than Friday. Then a week later, it just broke out to 0.86... only to fall back down to 0.76.
4. MPI - It didn't correct. I was anticipating a correction but it never made one. So if you're a long position trader, then I'm sure you're (still) happy with this stock.
The market didn't correct in the one to two weeks period I said after the Sept 24 post but this week, the market has taken a breather. This is a good respite so that people "late in the game" can still come in to participate in the stock market. The correction has been slow in force, and I suppose that's a good sign, rather than a one time steep correction.
Long term stock
I've said that I look at holding long term growth stocks based on common sense and reading the news. These are the primary reasons why I chose Atlas and Metro Pacific.
One stock that has caught my attention is DGTL. I don't know much about fundamental analysis so I won't try to be a genius and interpret their FS. What I know is that part of their business is the Sun Cellular brand - which recently claimed that they already led the other cellular networks in postpaid subscribers.
If you pass by any Sun Shop, you'll note that there are many people queuing in line to transact business, be it to pay bills or to apply for a postpaid line. With just a Php 250.00 monthly bill, anyone can get a postpaid line from them.
The story for DGTL at least for me is something like Cebu Pacific. Cebu Pacific has certainly come a long way. It took years to build but their business has certainly paid handsomely for its principals. Similarly, Sun Cellular was once a small player in the local duopoly of Globe and Smart. Look at where it is today and you'll know that in 1 to 2 years time, DGTL may fly the way PLTL did in the early years of this century.
The two problems with DGTL is
(1) their landline business, which probably pales in comparison to PLDT. Nonetheless, their venture into broadband internet should provide ample opportunities for growth.
(2) playing in a mature industry - the telco industry. The only thing these guys are doing is eating away at each other's market share. I doubt there's much growth in this sector, compared to the mining industry.
Some dark horses
GLO, a battered telco stock has recovered much from its low of 773, more or less, this year. A part of me is telling me that GLO may come out as a surprise by 2011. GLO is a dividend stock and is also an Ayala company. Ayala companies are known to give value to shareholders. They recently announced a share buy back program for AC.
Why GLO? Have you seen the number of people flocking to Globe business centers? Their aggressive marketing seems to be paying off. A company that invests in marketing will certainly see results. I think that they have a chance at eating at Smart's share of the postpaid business (and not Sun).
Another dark horse is ORE, which is why my title is "mine's here". M-ORE on this in the next post. ORE, unlike GLO, is a purely speculative play. If you consider Atlas to be speculative, then ORE may already border on gambling for you.
Until then!
I hope stock market enthusiasts have made money in the recent weeks. For the others who don't know or care about the stock market, maybe it's about time you did. I'm not surprised that most haven't.
Continue stocking up on the stock market...
Based on this news piece from the Inquirer,
"THE Philippine Stock Exchange estimates that less than 1 percent of the Philippine population invest in the stock market, but exactly how many people are we talking about?
Based on the latest headcount, that figure may be about 400,000—slightly less than the holiday foot traffic at SM’s most populous malls. This number covers the active retail investors, defined conservatively as those who trade at least once a year.
By demographics, local stock market investors usually are aged 30 to 50, majority of whom are male. About 35 percent of them are Chinoys, according to the PSE. "
And, if you're worried that maybe it's too late to enter the stock market, perhaps the last paragraph of Dean Somera's post would calm your nerves. If you don't want to go to the link anymore, basically this is the meat of the entire article -
"With the oversubscription of the CEB IPO and very positive public reaction to the SMDC SRO, market outlook is encouraging. And, if the market bulletin of one stockbrokerage house is correct when it said that current “foreign participation is only about P50 billion monthly versus the P100 billion monthly in the 2007 rally,” it seems that there are more money available to bolster current market momentum and direction."
With regards the CEB IPO, according to a news article in Inquirer, the local portion of the offering were "all sold". Some more "praise release", I suppose -
"This will be the largest IPO by a low-cost carrier in the Asia-Pacific to date. Its parent firm JG Summit expects to raise as much as P23.3 billion ($539 million), without having to exercise an option to sell even more shares.
The IPO is one of the largest ever conducted in the Philippines, and the largest Philippine IPO in US dollar terms."
Now, the question is, what will these IPO takers do on listing date? Sell the shares for a quick buck or hold it for the long term? My oh my, Php 23 Billion, then there's that transaction between Mang Inasal and Jollibee worth Php 3 Billion. These piles of cash should go somewhere!
I sure hope I get to be the kind of entrepreneur Mr. Sia is.
Reviewing my recommendations...
These recommendations were made September 24.
1. Atlas doing a correction - I was right. What I was wrong with was that after the correction, it went even higher to hit 18.32. Then again, I did say that,
"But if you're no expert (like me), you might as well just hold on to it as long as you've padded that many profits since you bought it at 10.50."
2. DGTL - I was right that you should not choose DGTL. This stock tanked after a gap up...
3. APC - And I was wrong with APC, as it also tanked on Monday, September 27. It opened higher than the Friday's close only to close lower than Friday. Then a week later, it just broke out to 0.86... only to fall back down to 0.76.
4. MPI - It didn't correct. I was anticipating a correction but it never made one. So if you're a long position trader, then I'm sure you're (still) happy with this stock.
The market didn't correct in the one to two weeks period I said after the Sept 24 post but this week, the market has taken a breather. This is a good respite so that people "late in the game" can still come in to participate in the stock market. The correction has been slow in force, and I suppose that's a good sign, rather than a one time steep correction.
Long term stock
I've said that I look at holding long term growth stocks based on common sense and reading the news. These are the primary reasons why I chose Atlas and Metro Pacific.
One stock that has caught my attention is DGTL. I don't know much about fundamental analysis so I won't try to be a genius and interpret their FS. What I know is that part of their business is the Sun Cellular brand - which recently claimed that they already led the other cellular networks in postpaid subscribers.
If you pass by any Sun Shop, you'll note that there are many people queuing in line to transact business, be it to pay bills or to apply for a postpaid line. With just a Php 250.00 monthly bill, anyone can get a postpaid line from them.
The story for DGTL at least for me is something like Cebu Pacific. Cebu Pacific has certainly come a long way. It took years to build but their business has certainly paid handsomely for its principals. Similarly, Sun Cellular was once a small player in the local duopoly of Globe and Smart. Look at where it is today and you'll know that in 1 to 2 years time, DGTL may fly the way PLTL did in the early years of this century.
The two problems with DGTL is
(1) their landline business, which probably pales in comparison to PLDT. Nonetheless, their venture into broadband internet should provide ample opportunities for growth.
(2) playing in a mature industry - the telco industry. The only thing these guys are doing is eating away at each other's market share. I doubt there's much growth in this sector, compared to the mining industry.
Some dark horses
GLO, a battered telco stock has recovered much from its low of 773, more or less, this year. A part of me is telling me that GLO may come out as a surprise by 2011. GLO is a dividend stock and is also an Ayala company. Ayala companies are known to give value to shareholders. They recently announced a share buy back program for AC.
Why GLO? Have you seen the number of people flocking to Globe business centers? Their aggressive marketing seems to be paying off. A company that invests in marketing will certainly see results. I think that they have a chance at eating at Smart's share of the postpaid business (and not Sun).
Another dark horse is ORE, which is why my title is "mine's here". M-ORE on this in the next post. ORE, unlike GLO, is a purely speculative play. If you consider Atlas to be speculative, then ORE may already border on gambling for you.
Until then!
Friday, September 24, 2010
Stock up on Stocks!
My Dear Guerilla Investing readers, thank you for being patient and coming by every so often. I've been busy with my 8-5 that I just couldn't find time to blog the past two weeks. For this week's post, I'll take a break first from my post about using credit cards to comment about the recent activity in the stock market.
I'm happy and surprised about the way the stock market has been performing since my last blog post. It's made a new historical high already and everybody seems to be in euphoria expecting the index to track higher and higher.
A local brokerage report anticipates the PSEi to go to about 5,100 by 2011, then there's another report by a foreign brokerage house that the PSEi will go beyond that to about 6,000 or more.
In fact, as a testament to the growing interest in the local stock market, Credit Suisse will open business here, to quote an Inquirer news item -
"Zurich-based global financial services group Credit Suisse is setting up a stock brokerage in the Philippines, reflecting the resurgence of foreign investor interest in local equities, which are now trading at record highs."
Exciting and interesting times are indeed ahead.
You can bet that a lot of the financial institutions - banks, insurance companies, brokerages - will earn big bucks in the year to come as interest by the investing public gains momentum. The momentum will surely boost the financial houses' trading gains.
Local Flavor
I've always maintained that there are now more local investors compared to years past; and, while foreign "hot money" is needed to elevate the stock market and perk up trading volume, we don't have to rely on them as much as we had to in the past.
Check out this piece of news -
Since the start of the year, the PSEi had gained by another 1,000.64 points or about 33 percent, making it one of the best performing bourses in the region. In 2009, the PSEi rose by 63 percent but mostly on thinner trading dominated by local investors.
While the volume was thin in 2009, our index still rose 63% - mostly due to local investors. Now imagine, with hot money flowing into the country then most likely the PSEi will make history again and again in the coming months, if not years. With the hot money coming in, the peso will also most likely appreciate.
This scenario is similar to the years 2006 - 2007, in my opinion.
Don't be too greedy
Right now, the market should be poised to correct.
All the index bellwether stocks have already gone up a mile and the second liners have also ran their course. The basura stocks are gaining momentum, which to my memory usually precedes a market correction.
Most of the counters gaining recently were the mining stocks, with one of my recommended stocks - Atlas Mining - leading the way (prior to Lepanto, that is). Even some mining stocks with no "stories to tell" (at least to me) went up like CPM, NI, and ORE. PX has since sputtered a bit after hitting a 2010 high of 17.
Atlas Mining may also correct in the week ahead. While I've recommended that this is a long term hold, you may do well to join the profit taking for your trading positions, if any. But if you're no expert (like me), you might as well just hold on to it as long as you've padded that many profits since you bought it at 10.50.
My other recommended stock may also be teetering on the brink of a major correction. I'm pointing to Metro Pacific or MPI. I'm closely monitoring it.
What I missed though was the major major (hehe) run-up of Lepanto Mining. I really felt bad that I was not able to join in, but I felt better when I read Mr. Gus Cosio's blog post last September 22, and I quote -
"Unfortunately, I was not able to take advantage of the big move in LC. I don’t mind because I do not flatter myself that I can spot every stock that moves."
I realized that I'm never going to be able to join in all the "gravy trains" of all the stocks. I just have to make sure that I'm able to gain a trading profit and always remember to cut losses, should the case be needed.
Trading Stock Focus
Mining stocks may really be one way to boost your portfolio. A report just came out recently that minerals outputs went up by 50%! Imagine that.
When the blue chips and second liners have made their uptrends , there's bound to be trading opportunities for the smaller stocks. Two stocks I saw that may be good to trade are APC and DGTL. APC suddenly went up near the closing hours for no reason and is pointing to an apparent breakout from its recent downtrend.
As my experience tells me, breakouts are always good trading opportunities and usually run their course for 3 days. With Wall Street trekking triple digits this Friday, I'm sure APC will have a follow through buying on Monday. Keep your fingers crossed, mine are.
On to DGTL. DGTL made a nice move on Thursday close. Then followed it up on Friday after news came out with Sun Cellular claiming the lead in postpaid versus giants Globe and Smart. The stock swung wildly, going up and down and up.
I checked the chart today, there's a gap up on Friday. On Monday we will know if DGTL will continue going up, or it was just a one day wonder. Gap ups, as far as I can remember, are a positive sign.
Between APC and DGTL though, I'd choose APC.
Of course, I'm assuming that if you, dear reader, plan to trade any of the two stocks, you have at least three to six months of trading experience.
You need at least some trading experience to know how to time your entry and exit points.
I can't teach you how to time, as I'm still learning the skill as well. It won't be perfect, so don't fret if you don't buy at the lowest price and sell at the highest price. If you do, then chances are, it's greed that's driving your motive.
Some guerilla tips on trading
For those who don't have as much experience, I proffer the following guerilla tips on stock trading -
(1) You don't have to buy the stock at the open. I've noticed that the time between 10AM to 11AM is a window of opportunity to buy a stock at a better price.
(2) Compare the buy up and sell down volume. If there's more sell down, it can mean two things - the insiders don't want it to go up yet; or, it's just a one day wonder. Better choose fear over greed. There'll be other stocks to trade anyways.
(3) Look at the quality of the buyers. Who are the brokerage houses buying? Of course, you will have to expect that if these are small stocks or basura stocks, there will be no foreign stock brokerages buying that stock. Try to know if the brokers are familiar names.
I think I've said too much already. Remember, the market is most likely going to correct soon since the blue chips and second liners have already started tapering off their gains. The second sign is that the small stocks have really gone up so much. I can't point to the exact date of the correction, but it will happen next week or the week after, so tread carefully.
As I always say, appreciate the risk, then appreciate the capital!
I'm happy and surprised about the way the stock market has been performing since my last blog post. It's made a new historical high already and everybody seems to be in euphoria expecting the index to track higher and higher.
A local brokerage report anticipates the PSEi to go to about 5,100 by 2011, then there's another report by a foreign brokerage house that the PSEi will go beyond that to about 6,000 or more.
In fact, as a testament to the growing interest in the local stock market, Credit Suisse will open business here, to quote an Inquirer news item -
"Zurich-based global financial services group Credit Suisse is setting up a stock brokerage in the Philippines, reflecting the resurgence of foreign investor interest in local equities, which are now trading at record highs."
Exciting and interesting times are indeed ahead.
You can bet that a lot of the financial institutions - banks, insurance companies, brokerages - will earn big bucks in the year to come as interest by the investing public gains momentum. The momentum will surely boost the financial houses' trading gains.
Local Flavor
I've always maintained that there are now more local investors compared to years past; and, while foreign "hot money" is needed to elevate the stock market and perk up trading volume, we don't have to rely on them as much as we had to in the past.
Check out this piece of news -
Since the start of the year, the PSEi had gained by another 1,000.64 points or about 33 percent, making it one of the best performing bourses in the region. In 2009, the PSEi rose by 63 percent but mostly on thinner trading dominated by local investors.
While the volume was thin in 2009, our index still rose 63% - mostly due to local investors. Now imagine, with hot money flowing into the country then most likely the PSEi will make history again and again in the coming months, if not years. With the hot money coming in, the peso will also most likely appreciate.
This scenario is similar to the years 2006 - 2007, in my opinion.
Don't be too greedy
Right now, the market should be poised to correct.
All the index bellwether stocks have already gone up a mile and the second liners have also ran their course. The basura stocks are gaining momentum, which to my memory usually precedes a market correction.
Most of the counters gaining recently were the mining stocks, with one of my recommended stocks - Atlas Mining - leading the way (prior to Lepanto, that is). Even some mining stocks with no "stories to tell" (at least to me) went up like CPM, NI, and ORE. PX has since sputtered a bit after hitting a 2010 high of 17.
Atlas Mining may also correct in the week ahead. While I've recommended that this is a long term hold, you may do well to join the profit taking for your trading positions, if any. But if you're no expert (like me), you might as well just hold on to it as long as you've padded that many profits since you bought it at 10.50.
My other recommended stock may also be teetering on the brink of a major correction. I'm pointing to Metro Pacific or MPI. I'm closely monitoring it.
What I missed though was the major major (hehe) run-up of Lepanto Mining. I really felt bad that I was not able to join in, but I felt better when I read Mr. Gus Cosio's blog post last September 22, and I quote -
"Unfortunately, I was not able to take advantage of the big move in LC. I don’t mind because I do not flatter myself that I can spot every stock that moves."
I realized that I'm never going to be able to join in all the "gravy trains" of all the stocks. I just have to make sure that I'm able to gain a trading profit and always remember to cut losses, should the case be needed.
Trading Stock Focus
Mining stocks may really be one way to boost your portfolio. A report just came out recently that minerals outputs went up by 50%! Imagine that.
When the blue chips and second liners have made their uptrends , there's bound to be trading opportunities for the smaller stocks. Two stocks I saw that may be good to trade are APC and DGTL. APC suddenly went up near the closing hours for no reason and is pointing to an apparent breakout from its recent downtrend.
As my experience tells me, breakouts are always good trading opportunities and usually run their course for 3 days. With Wall Street trekking triple digits this Friday, I'm sure APC will have a follow through buying on Monday. Keep your fingers crossed, mine are.
On to DGTL. DGTL made a nice move on Thursday close. Then followed it up on Friday after news came out with Sun Cellular claiming the lead in postpaid versus giants Globe and Smart. The stock swung wildly, going up and down and up.
I checked the chart today, there's a gap up on Friday. On Monday we will know if DGTL will continue going up, or it was just a one day wonder. Gap ups, as far as I can remember, are a positive sign.
Between APC and DGTL though, I'd choose APC.
Of course, I'm assuming that if you, dear reader, plan to trade any of the two stocks, you have at least three to six months of trading experience.
You need at least some trading experience to know how to time your entry and exit points.
I can't teach you how to time, as I'm still learning the skill as well. It won't be perfect, so don't fret if you don't buy at the lowest price and sell at the highest price. If you do, then chances are, it's greed that's driving your motive.
Some guerilla tips on trading
For those who don't have as much experience, I proffer the following guerilla tips on stock trading -
(1) You don't have to buy the stock at the open. I've noticed that the time between 10AM to 11AM is a window of opportunity to buy a stock at a better price.
(2) Compare the buy up and sell down volume. If there's more sell down, it can mean two things - the insiders don't want it to go up yet; or, it's just a one day wonder. Better choose fear over greed. There'll be other stocks to trade anyways.
(3) Look at the quality of the buyers. Who are the brokerage houses buying? Of course, you will have to expect that if these are small stocks or basura stocks, there will be no foreign stock brokerages buying that stock. Try to know if the brokers are familiar names.
I think I've said too much already. Remember, the market is most likely going to correct soon since the blue chips and second liners have already started tapering off their gains. The second sign is that the small stocks have really gone up so much. I can't point to the exact date of the correction, but it will happen next week or the week after, so tread carefully.
As I always say, appreciate the risk, then appreciate the capital!
Friday, August 27, 2010
Outlast... Atlas
Don't try to decipher the title. There's no meaning attached to it.
After saying don't touch Philex, it seems to have bucked its trend, at least temporarily. Volume was quite strong, looking at the chart. It's been going down for almost a year already, with intermittent bear rallies that salvage its share price. I suppose that at 9.25, it had gotten to a more tolerable PE ratio (I don't have it, but I suppose the share price is now closer to it).
So time to buy? Perhaps as a trading buy, yes. I can't point my finger and say, "Oh, PX is going back to 20."
Atlas Mining on the other hand, fell through the 11.00 roof. Tsk tsk.
As a trader, I'm frustrated with how Atlas performed this week.
If for long term holding, the stock should be a good one to hold, of course with one caveat - that they continue to earn money. That's why I said that Atlas should still be considered a speculative buy for the investor. When I said investor, it was someone who took a long term view.
Readers of my blog would know that I differentiate a trader from an investor. Trading is short term; investing is long term.
Trading Atlas?
Given my crude chart courtesy of PSE's website, support for Atlas is at 10.50. I think there may be some trading opportunities for it, so that should be a good entry price next week. The selling pressure should ease and hopefully, the buyers will regain their momentum.
If the PSE wants to attract more traders and investors, they should improve their charting program. I'm sure there are people out there who'd appreciate that.
One of the tools I always look at is the buy up vs. sell down volume. While this is taxing as you have to monitor it daily, it gives you a good grasp of the momentum of the stock. More sellers may mean bearishness, profit taking, etc. I don't buy when there's too many sellers because it means a lack of faith in the stock.
If the stock is continuously being bought up, then by all means join the party!
This style is only applicable to traders who tape read. If you have a day job and can't do that, then at least have a reliable stock broker who can do it for you. Usually, this can happen if your stock broker is also a trader. I'm sure he or she uses this tool too.
News also came out recently about the increased mining output of the Phils. This is certainly good news for the industry. I believe that this is an industry that can provide new avenues for economic growth.
Until the next post!
After saying don't touch Philex, it seems to have bucked its trend, at least temporarily. Volume was quite strong, looking at the chart. It's been going down for almost a year already, with intermittent bear rallies that salvage its share price. I suppose that at 9.25, it had gotten to a more tolerable PE ratio (I don't have it, but I suppose the share price is now closer to it).
So time to buy? Perhaps as a trading buy, yes. I can't point my finger and say, "Oh, PX is going back to 20."
Atlas Mining on the other hand, fell through the 11.00 roof. Tsk tsk.
As a trader, I'm frustrated with how Atlas performed this week.
If for long term holding, the stock should be a good one to hold, of course with one caveat - that they continue to earn money. That's why I said that Atlas should still be considered a speculative buy for the investor. When I said investor, it was someone who took a long term view.
Readers of my blog would know that I differentiate a trader from an investor. Trading is short term; investing is long term.
Trading Atlas?
Given my crude chart courtesy of PSE's website, support for Atlas is at 10.50. I think there may be some trading opportunities for it, so that should be a good entry price next week. The selling pressure should ease and hopefully, the buyers will regain their momentum.
If the PSE wants to attract more traders and investors, they should improve their charting program. I'm sure there are people out there who'd appreciate that.
One of the tools I always look at is the buy up vs. sell down volume. While this is taxing as you have to monitor it daily, it gives you a good grasp of the momentum of the stock. More sellers may mean bearishness, profit taking, etc. I don't buy when there's too many sellers because it means a lack of faith in the stock.
If the stock is continuously being bought up, then by all means join the party!
This style is only applicable to traders who tape read. If you have a day job and can't do that, then at least have a reliable stock broker who can do it for you. Usually, this can happen if your stock broker is also a trader. I'm sure he or she uses this tool too.
News also came out recently about the increased mining output of the Phils. This is certainly good news for the industry. I believe that this is an industry that can provide new avenues for economic growth.
Until the next post!
Friday, August 20, 2010
At last, Atlas!
Dear readers, so sorry for not having been able to post anything for quite some time. I've been stumped at work and just couldn't find time to update my blog. The title of this entry, "At last.." is a sigh of relief that now I'm able to update this blog again.
At last also refers to a recent mining stock that flew, unlike other basura mining stocks which overpromise and underdeliver. Since I love pun, I suppose "At last" was a good word play for Atlas Mining, which in the previous two weeks broke out from its consolidation phase in the 9.6 range to reach a high of 12.20, if I'm looking at the chart of Atlas (Ticker AT) of PSE correctly.
However, the run-up has died down a bit and it's just at 11.12. Running out of breath?
Without over-analyzing the chart, I think a little bit of logic is in order. Atlas Mining had been consolidating, meaning, trading within a range with seemingly no direction, for close two to four months already. Given this, there are people who, in trading parlance are called "weak hands", sell at the first sign of trading profits.
Other than the weak hands, I think there's a need to also coin a new term, "tired hands", which to me means and refers to people who got tired of holding a stuck (as opposed to a stock) and letting go even if the trading profit is downright absurd.
I think that Atlas Mining still has legs to go. They actually reported some good numbers for the first half of this year. Atlas probably won't be covered by the more prominent stock brokerage houses as these would probably go for big names like the Ayalas and Aboitizes of the world. From their press release,
"Atlas Consolidated Mining and Development Corporation (Atlas) is pleased to report a
P460 million net income for the first half of 2010. This result shows significant progress
given the P1,169 million loss incurred at the end of the last fiscal year. The second
quarter net income is also nearly triple the first quarter income of P164 million"
Atlas should be still be treated as a speculative stock with huge growth potential for a risk-appreciative investor's portfolio. However, the entry price can be tricky. At this point, the stock price is well off of its high. Personally, I hope the stock does not fall through the roof of 11.00. If it falls down, then in my belief, the stock has reversed its trend already, and you can buy cheaper, but not necessarily right away. You will have to wait it out. Why?
This week's daily chart looks nasty and next week should be a good proving ground for this, going up? or going down? I don't know. I just hope that the cliche,"history repeats itself" does not hold true. I'm pointing to the fact that late last year, it broke away from a range, zipped to 12, then crashed back to earth. If history repeats itself, then Atlas will go through yet another consolidation phase. Maybe you'd have an early Christmas if you buy Atlas in the 4th quarter. If you're a trader, then wait-and-see would be better.
I'm not flat out recommending this stock as it can just become a stuck again as company performance wise, they have to show more consistency. At least, there's a good story to go around, from a net loss, they're swinging into profit again.
This is unlike another listed mining company, Philex. Philex is a good company but a bad stock to trade. The stock just seems to be dying a slow death in terms of share price. So don't touch it.
I've learned my lessons with most mining and basura stocks. With the stock market going up and up, you're better off trading quality stocks than buying the basuras. I suppose that's why most of the money now are in the second liners like Metro Pacific, Megaworld, etc. However, with the new administration, I hope that the government can work with both the mining companies and the local government so that a mining renaissance can happen here.
After all, the country can't purely rely on BPOs as the growth engine for its economy. Medical tourism and mining should be growth areas in the next 6-12 months.
P.S. I'm glad I recommended Metro Pacific, which to me, is a stock you can hold until you grow old. Again, provided the management team is always competent. I look at Metro Pacific as a stock you buy because of the company and its potential. As most investors say, "buy the company, not the stock." When I recommended it, it was not based on studying their FS nor its chart. It was purely out of common sense. (MPI also has interests in FOUR hospitals)
Sometimes people get lost in the "fundamental analysis" or "technical analysis" of a stock that they forget common sense. Of course, it's also a matter of asking yourself, how long will you hold the stock for?
As we speak, Metro Pacific has a TV commercial in CNBC (or was it Bloomberg? or both?). So watch out as the company draws interest from big foreign brokerage houses. A company with that much marketing muscle presupposes a lot of room for growth in the company's performance.
So until my next post, appreciate the risk, then appreciate the capital!
At last also refers to a recent mining stock that flew, unlike other basura mining stocks which overpromise and underdeliver. Since I love pun, I suppose "At last" was a good word play for Atlas Mining, which in the previous two weeks broke out from its consolidation phase in the 9.6 range to reach a high of 12.20, if I'm looking at the chart of Atlas (Ticker AT) of PSE correctly.
However, the run-up has died down a bit and it's just at 11.12. Running out of breath?
Without over-analyzing the chart, I think a little bit of logic is in order. Atlas Mining had been consolidating, meaning, trading within a range with seemingly no direction, for close two to four months already. Given this, there are people who, in trading parlance are called "weak hands", sell at the first sign of trading profits.
Other than the weak hands, I think there's a need to also coin a new term, "tired hands", which to me means and refers to people who got tired of holding a stuck (as opposed to a stock) and letting go even if the trading profit is downright absurd.
I think that Atlas Mining still has legs to go. They actually reported some good numbers for the first half of this year. Atlas probably won't be covered by the more prominent stock brokerage houses as these would probably go for big names like the Ayalas and Aboitizes of the world. From their press release,
"Atlas Consolidated Mining and Development Corporation (Atlas) is pleased to report a
P460 million net income for the first half of 2010. This result shows significant progress
given the P1,169 million loss incurred at the end of the last fiscal year. The second
quarter net income is also nearly triple the first quarter income of P164 million"
Atlas should be still be treated as a speculative stock with huge growth potential for a risk-appreciative investor's portfolio. However, the entry price can be tricky. At this point, the stock price is well off of its high. Personally, I hope the stock does not fall through the roof of 11.00. If it falls down, then in my belief, the stock has reversed its trend already, and you can buy cheaper, but not necessarily right away. You will have to wait it out. Why?
This week's daily chart looks nasty and next week should be a good proving ground for this, going up? or going down? I don't know. I just hope that the cliche,"history repeats itself" does not hold true. I'm pointing to the fact that late last year, it broke away from a range, zipped to 12, then crashed back to earth. If history repeats itself, then Atlas will go through yet another consolidation phase. Maybe you'd have an early Christmas if you buy Atlas in the 4th quarter. If you're a trader, then wait-and-see would be better.
I'm not flat out recommending this stock as it can just become a stuck again as company performance wise, they have to show more consistency. At least, there's a good story to go around, from a net loss, they're swinging into profit again.
This is unlike another listed mining company, Philex. Philex is a good company but a bad stock to trade. The stock just seems to be dying a slow death in terms of share price. So don't touch it.
I've learned my lessons with most mining and basura stocks. With the stock market going up and up, you're better off trading quality stocks than buying the basuras. I suppose that's why most of the money now are in the second liners like Metro Pacific, Megaworld, etc. However, with the new administration, I hope that the government can work with both the mining companies and the local government so that a mining renaissance can happen here.
After all, the country can't purely rely on BPOs as the growth engine for its economy. Medical tourism and mining should be growth areas in the next 6-12 months.
P.S. I'm glad I recommended Metro Pacific, which to me, is a stock you can hold until you grow old. Again, provided the management team is always competent. I look at Metro Pacific as a stock you buy because of the company and its potential. As most investors say, "buy the company, not the stock." When I recommended it, it was not based on studying their FS nor its chart. It was purely out of common sense. (MPI also has interests in FOUR hospitals)
Sometimes people get lost in the "fundamental analysis" or "technical analysis" of a stock that they forget common sense. Of course, it's also a matter of asking yourself, how long will you hold the stock for?
As we speak, Metro Pacific has a TV commercial in CNBC (or was it Bloomberg? or both?). So watch out as the company draws interest from big foreign brokerage houses. A company with that much marketing muscle presupposes a lot of room for growth in the company's performance.
So until my next post, appreciate the risk, then appreciate the capital!
Saturday, November 14, 2009
MP, Metro Pacific and Manny Pacquiao
The index recently broke the 3,000 barrier and closed up at 3,034 last Friday for the year. Due to losses in the US (and perhaps people cashing in to bet for Pacquiao-Cotto fight) the market lost momentum on the 13th. Philex also lost its luster Friday and fell by 14% to 16.75, bringing down with it the mining index. Those who bought at the 19 range better be wary.
Having risen by 100% in such a short time may mean a free fall in also the same short period to God knows where. There is no strong support for the stock having risen continuously when it breached the 10 barrier. The good thing though, at least for those who bought at the 13 level, is that they still made money (assuming they exited at 19). That's still almost 50%.
I could be wrong.
The performance of these two stocks this year - Meralco and Philex - reflects the state of our market. It is both bullish and speculative. Basura stocks are gaining and even blue chip stocks are being speculated upon. Some of the other winners for this year was WEB, and the Angping stocks, especially Nihao is back with a vengeance. As we reach the year end rally (hopefully), you may wish to take the time to think about 2010.
If you think 2010 will be a better year, then hold on to your stocks and buy the corrections. Otherwise, this could be your time to scale back and take profits while there is one. I wanted to look at the volume, as well as the amount of foreign buying for this year, but I don't have access to those information. Those are also good indicators as to the sustainability of the recent bullishness in the market.
Winners during the past week were Philex (double your money in less than a month, code: PX), Century Peak Minerals (code: CPM), Alsons Consolidated (Code: ACR), I-remit (I), and TK Steel (T). There were also other stocks that rose, mostly basura stocks, and index issues. The worst performer, at least based on the stocks that I monitor, was Metro Pacific, falling by almost 30%. What's amazing is that they recorded huge revenues.
The stock price perhaps does not reflect the correct value. At least for now. Having made so many acquisitions, as well as the possibility of diluting shareholders, bearish sentiment has killed the stock. But as Buffett is says, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
I visited their website and looked at the businesses they now hold - hospitals, toll roads, water utilities. These are businesses that do well when the economy is good, and don't suffer as much when the economy is bad.
Using common sense, I think Metro Pacific is a buy, although it will definitely be a long term buy (as long as 2-3 years from today) as we still have to wait what happens when they list new shares (unless they've done so already, I don't track the news that much). Its 52-week high is 7.10 and 52-week low is 2.08. Trading volume for the stock has increased substantially this year. But of course, there's the threat by GSIS over the recent acquisition of Meralco shares.
GSIS killed Meralco last year and they migh very well do the same for MPI this year. Sniff the news whenever it's out in the press.
I also don't know much about financial ratios so I don't bother reviewing them. What I do know is that perhaps, there's a lot of debt going around at MPI.
Of course, this is just my opinion. Investor discretion is advised and you should consult with your own financial advisor. Investments take time to generate consistent cash flows and 3 years is about the right time frame to expect the kind of revenues that MPI holdings should have with its current portfolio of companies.
**************
At least the other MP (not listed in the PSE) made winners of those who betted for him in today's fight. I'm talking about Manny Pacquiao. He beat Cotto with a TKO (hey that rhymes).
Congratulations to Pacquiao! I just hope he doesn't enter politics.
In the U.S., there's been an attempt to correlate Tiger Wood's golf games to the performance of the Dow Jones. Perhaps, we should do one for Manny Pacquiao and the Philippine Index.
Until then, be careful where you invest. Tomorrow may be another up day because of the euphoria as well as the positive end for the Dow last Friday.
Having risen by 100% in such a short time may mean a free fall in also the same short period to God knows where. There is no strong support for the stock having risen continuously when it breached the 10 barrier. The good thing though, at least for those who bought at the 13 level, is that they still made money (assuming they exited at 19). That's still almost 50%.
I could be wrong.
The performance of these two stocks this year - Meralco and Philex - reflects the state of our market. It is both bullish and speculative. Basura stocks are gaining and even blue chip stocks are being speculated upon. Some of the other winners for this year was WEB, and the Angping stocks, especially Nihao is back with a vengeance. As we reach the year end rally (hopefully), you may wish to take the time to think about 2010.
If you think 2010 will be a better year, then hold on to your stocks and buy the corrections. Otherwise, this could be your time to scale back and take profits while there is one. I wanted to look at the volume, as well as the amount of foreign buying for this year, but I don't have access to those information. Those are also good indicators as to the sustainability of the recent bullishness in the market.
Winners during the past week were Philex (double your money in less than a month, code: PX), Century Peak Minerals (code: CPM), Alsons Consolidated (Code: ACR), I-remit (I), and TK Steel (T). There were also other stocks that rose, mostly basura stocks, and index issues. The worst performer, at least based on the stocks that I monitor, was Metro Pacific, falling by almost 30%. What's amazing is that they recorded huge revenues.
The stock price perhaps does not reflect the correct value. At least for now. Having made so many acquisitions, as well as the possibility of diluting shareholders, bearish sentiment has killed the stock. But as Buffett is says, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
I visited their website and looked at the businesses they now hold - hospitals, toll roads, water utilities. These are businesses that do well when the economy is good, and don't suffer as much when the economy is bad.
Using common sense, I think Metro Pacific is a buy, although it will definitely be a long term buy (as long as 2-3 years from today) as we still have to wait what happens when they list new shares (unless they've done so already, I don't track the news that much). Its 52-week high is 7.10 and 52-week low is 2.08. Trading volume for the stock has increased substantially this year. But of course, there's the threat by GSIS over the recent acquisition of Meralco shares.
GSIS killed Meralco last year and they migh very well do the same for MPI this year. Sniff the news whenever it's out in the press.
I also don't know much about financial ratios so I don't bother reviewing them. What I do know is that perhaps, there's a lot of debt going around at MPI.
Of course, this is just my opinion. Investor discretion is advised and you should consult with your own financial advisor. Investments take time to generate consistent cash flows and 3 years is about the right time frame to expect the kind of revenues that MPI holdings should have with its current portfolio of companies.
**************
At least the other MP (not listed in the PSE) made winners of those who betted for him in today's fight. I'm talking about Manny Pacquiao. He beat Cotto with a TKO (hey that rhymes).
Congratulations to Pacquiao! I just hope he doesn't enter politics.
In the U.S., there's been an attempt to correlate Tiger Wood's golf games to the performance of the Dow Jones. Perhaps, we should do one for Manny Pacquiao and the Philippine Index.
Until then, be careful where you invest. Tomorrow may be another up day because of the euphoria as well as the positive end for the Dow last Friday.
Friday, May 29, 2009
@#$%
After ranting during my last post, I was looking forward to some positive posting. Little did I know Friday would be another one of those @#$% days.
What's worse than being left out of the market?
Knowing what to buy, being held back by fear, then realizing your error after.
I'm talking about MPI. Metro Pacific Investments.
As early as late last year, I was already looking at this stock. It wasn't because of the FS, it wasn't because of the charts. It was purely on gut feel and knowing what kind of businesses they have.
You might say that's a load of crap, but I was really looking at it. Think about it, a tollway business, property (and a possibility of selling Landco Pacific), and more importantly two hospitals.
Followers and readers of my blog for a long time would have read an entry of mine last November regarding healthcare, albeit short. So if I'm bullish on healthcare, naturally I'd be looking at MPI with keen interest.
Last post I said I don't normally hype stocks - and I'm not hyping it now. Because if you've seen its performance yesterday +28% from its Thursday close, then you'll know that hyping is the last thing on my mind.
I was again left out. What's worse, during the morning, I called up my broker, and out of instincts, I said could you check up MPI for me?
@#$@#$#@$#@.
What ever your comments are of this post - or of MPI - what I can say is that in the future, MPI will be big. You will have to take a long view. And with Manny Pangilinan sticking around, MPI might well be Manny Pangilinan's Investments.
In 2006, I kicked myself in the arse because I also made another mistake - with IPVG. During that time it was just doing 1.00.
Crap.
Disclaimer: Again, I'm not offering investment advice for you to buy or sell MPI, or any other stock for that matter. The decision really rests on you. Know what you're getting into first before you take action.
What's worse than being left out of the market?
Knowing what to buy, being held back by fear, then realizing your error after.
I'm talking about MPI. Metro Pacific Investments.
As early as late last year, I was already looking at this stock. It wasn't because of the FS, it wasn't because of the charts. It was purely on gut feel and knowing what kind of businesses they have.
You might say that's a load of crap, but I was really looking at it. Think about it, a tollway business, property (and a possibility of selling Landco Pacific), and more importantly two hospitals.
Followers and readers of my blog for a long time would have read an entry of mine last November regarding healthcare, albeit short. So if I'm bullish on healthcare, naturally I'd be looking at MPI with keen interest.
Last post I said I don't normally hype stocks - and I'm not hyping it now. Because if you've seen its performance yesterday +28% from its Thursday close, then you'll know that hyping is the last thing on my mind.
I was again left out. What's worse, during the morning, I called up my broker, and out of instincts, I said could you check up MPI for me?
@#$@#$#@$#@.
What ever your comments are of this post - or of MPI - what I can say is that in the future, MPI will be big. You will have to take a long view. And with Manny Pangilinan sticking around, MPI might well be Manny Pangilinan's Investments.
In 2006, I kicked myself in the arse because I also made another mistake - with IPVG. During that time it was just doing 1.00.
Crap.
Disclaimer: Again, I'm not offering investment advice for you to buy or sell MPI, or any other stock for that matter. The decision really rests on you. Know what you're getting into first before you take action.
Wednesday, June 25, 2008
Tales of the Guerilla Investor - Interesting Public Offering
I attended the recent CAF of Absolute Traders last June 24 at the trading floor of the Philippine Stock Exchange. The number of audience participants was modest, compared to previous CAFs, where the venue would always be filled to the brim. One reason for such a modest turnout is the state of the Philippine stock market, which has bled uncontrollably since the start of the year.
This CAF was notably different than previous CAFs in that there was a fundamental analysis presentation. The fundamental analysis portion was presented by Sandy Gilles, a CFA. The key take away from his presentation is that the current stock market is at a fair PE ratio. This means that the stock prices are not expensive relative to the earnings growth for PSE-listed companies. It is expected that companies will have income growth of about 11%.
Stock buyers beware though. This does not mean that the market has bottomed out. There are issues like inflation, weather (due to its correlation with rice production), gas prices, and further government monitoring of the utility sector.
Absolute Traders Chairman, Mr. Fitz Aclan also presented his view of the market. Based on charts, there are still downside risks to the PSE with a worst case scenario of the index falling to 2,000 or 2,200. The worst case scenario will be made possible in a situation wherein crude oil exceeds $150, local inflation rate goes beyond 12%, and downgrades by foreign financial institutions and ratings agencies.
One interesting slide that he presented was a slide on the worst stock performers (index linked stocks) since the start of the subprime crisis in the US. FPH ranked the first with a -77% paper loss (or actual loss, if you realized it by selling). The resilient stocks were only three -
ICT (+1.72%)
MWC (+42%)
PX (+79%)
Who says you can't make money in a bear market? You just have to have an eye for the right stock.
Nurturing the Agriculture sector
Despite the gloom and doom that fell upon the audience, one shining light was the upcoming IPO of an agriculture-based company, Agrinurture Inc. Not only is it an initial public offering, it is also an interesting public offering. The company presentation was represented by no other than their CEO, Tony Tiu.
I always enjoy business presentations from reputable and upcoming businesses. This is one of them.
Prior to the presentation though, I had my doubts about the company. Who is Agrinurture? If my broker inquired if I wanted to get the IPO, should I bother? After the presentation, all my doubts were laid to rest.
Mr. Tiu's presentation was both about the company and a reminder of how our country has gone down the wrong road in terms of the agricultural sector. If you take a look at this list, I ask you, is agriculture a bad sector to invest in? Look at the countries and tell me, aren't ALL of them considered part of the developed world? Doesn't this give us a hint that agriculture is actually a good sector to invest in?
For one, our country's people would rather work in offices than plow the fields largely because the salary of these two are in opposite extremes. Yet, it's not like our country has no natural resources. Compare ourselves to Singapore. Singapore imports most of its agricultural needs because their country has little to no arable lands. What about ours? Are chip manufacturing, BPOs and ship-building the only sectors that our country has to offer?
According to Mr. Tiu, Siliman University used to have 900 agriculture undergraduates. It's fallen to just 50. Sometimes we have to wonder where did we all go wrong? Is it because people are practical so they want to take up better courses to work in offices with good pay? Is it because there are no opportunities in the agricultural sector? Which is the chicken, and which is the egg? By the way, if there were no poultry farms, we won't even have chicken nor eggs.
New Stock on the Block
I like their company initial, ANI. It's very positive and also relates well to the industry where the company operates in. Kudos to the person who thought about that.
I won't divulge much of their business operations as that will be made possible by the prospectus that will come out once the IPO plans have been finalized. Apart from that, what I share is already second hand information. I would rather the company do their presentation via their own representative.
What I can share though is my impression and what I like about their company. They are big exporters of canned coconut juice and other fruits. They are a major supplier to the biggest supermarket chain in the country. They have acquired a popular juice retailer brand that is a natural extension of their business, i.e. fruits. They are also looking into the agricultural estate business, which to me is very promising.
One of their key growth drivers is the food crisis. Don't you just wish you were in a business that could say that? As Mr. Tiu rightly puts it, "In good times we eat, in bad times, we eat more." Apart from that, it's been historically proven that in high inflation environments, prices of basic commodities go higher, driven by demand from people doing panic buying. During bad times, you'd obviously put your money in essentials, and do away with those that are not.
I hope the investing public would be interested in this stock. Do note, this is going to be the only stock that is directly involved in the agricultural sector. Moreover, they will likely prosper in this volatile stock market times.
P.S. I found this appalling set of data from a press release by the PSE. Imagine, if you add another 1% to the number of people who trade the stock market, or even people who would just buy and hold, stock prices would definitely increase due to the increased demand. Go figure.
This CAF was notably different than previous CAFs in that there was a fundamental analysis presentation. The fundamental analysis portion was presented by Sandy Gilles, a CFA. The key take away from his presentation is that the current stock market is at a fair PE ratio. This means that the stock prices are not expensive relative to the earnings growth for PSE-listed companies. It is expected that companies will have income growth of about 11%.
Stock buyers beware though. This does not mean that the market has bottomed out. There are issues like inflation, weather (due to its correlation with rice production), gas prices, and further government monitoring of the utility sector.
Absolute Traders Chairman, Mr. Fitz Aclan also presented his view of the market. Based on charts, there are still downside risks to the PSE with a worst case scenario of the index falling to 2,000 or 2,200. The worst case scenario will be made possible in a situation wherein crude oil exceeds $150, local inflation rate goes beyond 12%, and downgrades by foreign financial institutions and ratings agencies.
One interesting slide that he presented was a slide on the worst stock performers (index linked stocks) since the start of the subprime crisis in the US. FPH ranked the first with a -77% paper loss (or actual loss, if you realized it by selling). The resilient stocks were only three -
ICT (+1.72%)
MWC (+42%)
PX (+79%)
Who says you can't make money in a bear market? You just have to have an eye for the right stock.
Nurturing the Agriculture sector
Despite the gloom and doom that fell upon the audience, one shining light was the upcoming IPO of an agriculture-based company, Agrinurture Inc. Not only is it an initial public offering, it is also an interesting public offering. The company presentation was represented by no other than their CEO, Tony Tiu.
I always enjoy business presentations from reputable and upcoming businesses. This is one of them.
Prior to the presentation though, I had my doubts about the company. Who is Agrinurture? If my broker inquired if I wanted to get the IPO, should I bother? After the presentation, all my doubts were laid to rest.
Mr. Tiu's presentation was both about the company and a reminder of how our country has gone down the wrong road in terms of the agricultural sector. If you take a look at this list, I ask you, is agriculture a bad sector to invest in? Look at the countries and tell me, aren't ALL of them considered part of the developed world? Doesn't this give us a hint that agriculture is actually a good sector to invest in?
For one, our country's people would rather work in offices than plow the fields largely because the salary of these two are in opposite extremes. Yet, it's not like our country has no natural resources. Compare ourselves to Singapore. Singapore imports most of its agricultural needs because their country has little to no arable lands. What about ours? Are chip manufacturing, BPOs and ship-building the only sectors that our country has to offer?
According to Mr. Tiu, Siliman University used to have 900 agriculture undergraduates. It's fallen to just 50. Sometimes we have to wonder where did we all go wrong? Is it because people are practical so they want to take up better courses to work in offices with good pay? Is it because there are no opportunities in the agricultural sector? Which is the chicken, and which is the egg? By the way, if there were no poultry farms, we won't even have chicken nor eggs.
New Stock on the Block
I like their company initial, ANI. It's very positive and also relates well to the industry where the company operates in. Kudos to the person who thought about that.
I won't divulge much of their business operations as that will be made possible by the prospectus that will come out once the IPO plans have been finalized. Apart from that, what I share is already second hand information. I would rather the company do their presentation via their own representative.
What I can share though is my impression and what I like about their company. They are big exporters of canned coconut juice and other fruits. They are a major supplier to the biggest supermarket chain in the country. They have acquired a popular juice retailer brand that is a natural extension of their business, i.e. fruits. They are also looking into the agricultural estate business, which to me is very promising.
One of their key growth drivers is the food crisis. Don't you just wish you were in a business that could say that? As Mr. Tiu rightly puts it, "In good times we eat, in bad times, we eat more." Apart from that, it's been historically proven that in high inflation environments, prices of basic commodities go higher, driven by demand from people doing panic buying. During bad times, you'd obviously put your money in essentials, and do away with those that are not.
I hope the investing public would be interested in this stock. Do note, this is going to be the only stock that is directly involved in the agricultural sector. Moreover, they will likely prosper in this volatile stock market times.
P.S. I found this appalling set of data from a press release by the PSE. Imagine, if you add another 1% to the number of people who trade the stock market, or even people who would just buy and hold, stock prices would definitely increase due to the increased demand. Go figure.
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