The story behind $SUN and some analysis

Suntrust Home Developers, Inc. (SUN) is run by Andrew Tan, which, as many of you already know, also runs AGI, MEG, ELI, and GERI.

There's a rumor circulating that SUN could be used as a backdoor for Travellers International Group (a joint venture between AGI and Genting Hong Kong, owners of Resorts World Manila and are also set to build the new Resorts World Bayshore).

Does this make any sense? My personal opinion: YES, it does. IPO is expensive, maintaining a listed company is also expensive, so it's a win win if Andrew Tan already owns a listed company that can be converted into a more profitable venture.

Conglomerates are now thinking of merging their property units, it's also possible that AGI is also thinking of merging its own property units MEG, ELI and GERI. Since SUN only has a small portfolio, it may be excluded from the merger.

If you look at SUN's history, however, you'll notice that it has a shady background before it became the SUN we know today. Before SUN changed its name in 2002, it was the controversial BW Resources (Symbol: BW). In 1999, its share price skyrocketed from P2 to P107 (5K% increase) when a rumor spread that Stanly Ho, a bigtime Macau casino operator, was investing in BW to build a Casino in the Philippines.  Stanly Ho even made an appearance in the Philippines which further contributed to an increase in BW's share price.

The deal never went through and BW's share price plunged. According to PSE's investigation, it was stock manipulation through wash sales in which the buyer and the seller are the same to deceive investors that the stock is active and profitable. Allegedly, cronyism played a major role in this scandal. Dante Tan (Major shareholder of BW) and JV Ejercito were business partners and friends.

Today, the motive may be more legitimate, and the deal may more likely push through but who really knows? No one yet. As of writing, AGI is neither confirming nor denying it. Its latest disclosure is vague, stating that Traveller's Group is looking at both debt and equity market for its financing.

However, there's another twist to the story. Remember Stanly Ho? He still owns a chunk of overvalued shares in BW Resources which is now SUN. It is also possible that this is just a way out for him, jacking the price up for profit or just to get his investment back. Again, who knows! Either way, SUN's share price would go up.

CAVEAT! Just a personal opinion, there's no guarantee in this analysis. Agree or disagree? Share it in the comment section below :)


Source 1, Source 2, Photo from archian, Special thanks to my mentor

How to top-up your investment in FAMI using Metrobank Direct

If you already have a Metrobank Direct account, it's never easier to add more money in your FAMI investments (SALEF, SALFIF, SALBF, SALMF):

This tutorial assumes you already have your FAMI and Metrobank Direct accounts, if you don't have it yet, please enroll first.

click the image for larger view

Steps to top-up any FAMI investment:

1. Login to your Metrobank Direct Account.

2. Go to "Pay Bills" Section

3. Select "First Metro Save & Learn ..." of your choice

4. Enter your Account No and left-pad it with zeroes to make it an 8 digit number. E.g. if your account number is 12345, you should put 00012345 in the Account No.

5. Enter the same number in the Reference No. field.

6. Input your phone number where you can be contacted should there be issues encountered.

7. Enter the amount of money you want to add to your investment. Minimum of P1000 is required.

8. Click the Continue button.

9. Review the summary and confirm your action.

That's it! Wait a few days to get your confirmation receipt.

Note that if you're already enrolled to one of the FAMI investment products e.g. Save and Learn Fixed-Income fund, you can add to any product of your choice (SALEF, SALFIF, SALBF, SALMF)

Top Stock Picks this April 2013 [Philippines]

Some of my previous picks last March 2013 already appreciated significantly. Today, I give another list of stocks which I believe have great potential.

First a disclaimer: What I'll write below is just my personal opinion. The state of market right now is very unpredictable, plus May is just around the corner (there is a saying "Sell in May and walk away!") so take these recommendations with utmost caution and analysts say we're still due for a major correction, but nobody knows for sure what will happen, so might as well put some of my money in my picks:


CPG
Century Properties already released its financials and at P2.04 per share, its P/E is at 10.7. I believe the stock is undervalued and may reward greatly if you hold it long term. The company is expected to earn P3B by 2015. I believe CPG is one of the "rising companies" of the Philippines.

EDC
If you can get this below P6.4 per share then I believe it's a good deal. Its sell down due to Bacman problem may be overly done, and at a technical point of view, the upside is great. But personally, I don't like the management of EDC, FGEN, LPZ and related companies... if you know what I mean.

AEV
Among the blue chips / companies in the PSE index, Aboitiz Equity Ventures has one of the lowest P/E of 12.5 at its current price of 54.3. One thing to note with Aboitiz companies is they are not very popular, I think they should do more PR and commercials for people to notice and invest in them.

VLL
Vista Land released its financials and its P/E is very low which means it's a very good deal. Warning though: This April, VLL's stock price already increased from P5.4 to P6.07 but even at P6.07 the P/E is 11.8, still relatively low so there's still opportunity to buy.



My strategy in this kind of market (very unpredictable) is to have 50% cash, and the other 50% I do averaging on my picks. E.g. buy 10% of my picks now, then if the price goes down significantly buy another 10% and so on. Maybe I'll allocate if stock prices go down in May or if there's a big correction.

I just hold what I have 'til maybe end of the year or next.

A New Face to Pesobility.com

The site www.pesobility.com is now online, this is to complement Pesobility blog (blog.pesobility.com) with free tools, discussions and additional references for investing.

Currently the tools are now focused on the stock market, but additional tools for other types of investments are planned to be added later.

Some pages have comment sections for discussion.

Utilities

Stock / Company Search
On the upper left of www.pesobility.com there is a search box. Just type in the symbol or the name of the listed company and a dropbox will appear, select the desired stock and it will take you to the stock information page.

Stock Information Page (WIP)
Example is the stock information page of SM. This page lists several information about the stock like the current price, previous close, 52-week high, and most importantly it contains the PE Ratio of several stocks that I compute. It also contains PE Ratio based from PSE but it's not very reliable.

Stock information page has a comment section for discussion.

More enhancements to come, including displaying the PE Ratio from Bloomberg which I believe is more reliable than PSE. Graphs for technical analysis is also a work in progress.


Stock Prices Page

This lists all the stocks, their current price and its movement (percentage) from its previous close.


Opportunity Buy and Sell Page

During the market pre-close where the PSE system is matching the last price for the day of each stock, Pesobility takes a snapshot of the stock prices then compare it with the prices at market run-off. Sometimes there are opportunities when the system matches are way below (or way higher) the snapshot price.

If the prices difference is significant from the snapshot, a "Run-off %" will be filled up. A negative "Run off %" is an opportunity to buy and a positive is an opportunity to sell.


PE Ratio by Industry Page (WIP)

Price to Earning (PE) ratio is a good fundamental indicator if a stock is overpriced or undervalued, however, it is more accurate if a stock's PE is compared with other stocks in the similar industry. The PE Ratio by Industry is a work-in-progress (WIP) page to list stocks according to its industry and display the PE Ratio of each stock.

Reference Pages

PSE Board Lot

PSE Trading Hours

Current Business News

Blue Chip Companies in the Philippines

Virtual Stocks Trading

You can buy and sell using virtual money on live market. Whether you want to hone your decision skills or you just want to see what happens in the future if you buy a certain stock now. This is a hassle-free way of learning trading in the stock market and testing your skills and research.

For now, the registration is still closed, but you may request by emailing me for a trial account. Upon approval, you will be given an account at www.pesobility.com and buy and sell stocks using virtual money.

Down Market of March 14

Today, PSEi slip below 6,700 mark to 6,694.71; it's down by 1.21%. Many are saying it's because of China, it's because of HSBC telling that we're overpriced. But aside from those, I think a major factor is today is the cash dividends Ex-Date of several companies in the PSE index: PLDT (TEL), Aboitiz Equity Ventures (AEV), and Aboitiz Power (AP). These stocks (which contributes to a significant weight in PSEi) are expected to go down today because of the cash div ex date.

Tomorrow, no one knows what will happen. Hopefully it's a better day for the stock market.

AGI may NOT be a good buy

Alliance Global Inc. (AGI) has just disclosed its 2012 income of P20.8 billion. For its current price of 21.65 my computed PE is 10.691. A low PE + AGI is on PSE index (a blue chip). Conservative target price is around P25.

Sorry guys, after double checking it's not a very good buy after all. After checking its disclosure at PSE, the income attributable to shareholders is only 13.6B and NOT 20.8B. This makes it a 16+PE stock. It's still below our average market PE of 18-19 but this is not a VERY good buy, the upside is not very high.

The press release of 20.8B AGI income is just a hype.

Although AGI has a buying spree on the first half of today (March 15), it may already be a good sell at 22.5 if you got it 22 or below.

My Top Stock Picks for March 2013 [Philippines]

It's getting harder and to pick undervalued stocks these days. But as of today, here's my list for the month of March (2013):


Aboitiz Power (AP)

Aboitiz hasn't announced their 2012 income yet, but my projected PE Ratio for AP is around 11.56 for its current price of P38.50. This is low considering the state of our market today. It will also probably give cash dividends ~4% on today's stock price.
AP's cash dividends ex-date was on March 14. It's expected to go down at least P1.66. For people who are still holding, suggest to continue holding it for longer period (probably until before May).

Security Bank (SECB)

Based on SECB's unaudited income of 7.5B, its PE ratio should be 10.68 11.9 at its current price of P176.70. A low PE especially when you compare it with other banks which are somewhere in the range of 18-20.


PLDT (TEL)

Actually this is my Feb pick, but just in case it still slips below 2900, I think it's a good buy. It will also announce its financial statement on March 6 (same day as Aboitiz) and probably the details of its cash dividends too ~3.9% on today's stock price. It also had a big one-time gain from selling its BPO unit so it has a buffer; the buffer is ~P12B, I think.
TEL cash div ex-date was on March 14 also. It's expected to go down at least P112. Also Citi has a sell alert on TEL with TP = P2700.

[Update]
Manila Water (MWC)

My computed PE for MWC is 13.45 at its current price of P36.35. For an Ayala company, I believe a PE ratio of 13.45 is low. This was my first stock that I bought last november 2012; priced around ~P31. I still hold this stock; as a matter of fact, I topped up last month at ~P34.

This is my personal choice for a long term stock investment. I had neither fundamental nor technical analysis in making MWC my favorite. Even though my other stocks such as MEG, AEV and BDO that I bought after MWC already surpassed its gains, I just like the fact that it's an Ayala company and I like how its graph looks like: a slow uptrend growth. I'm just glad it is showing a good PE ratio and I can recommend it with a basis.


UnionBank (UBP)

My estimated PE ratio is 10.75 at the current price of 127. Aboitiz companies today generally have low PE ratio, when people notice this I believe it will spark a chain reaction on the Aboitiz companies with relatively low PE's like AP, UBP, AEV considering that many of the stocks in our market today are overpriced.

[Update March 14, 2013]

AGI
Alliance Global Inc. (AGI) has just disclosed its 2012 income of P20.8 billion. For its current price of 21.65 my computed PE is 10.691. A low PE + AGI is on PSE index (a blue chip). Conservative target price is around P25.
Please see explanation for more details. AGI's income attributable to shareholders is 13.6B and not 20.8B.

Disclaimer: This is based on personal opinion and research. I'm not liable for any loss in case the above statements are incorrect or the market suddenly crashes. Happy investing!