Stock Thoughts: LPZ, GREEN, PNB, MEG

LPZ

LPZ’s stock price plunged 4% today to 6.20. There is nothing to be worried about.

The catalysts that I am waiting for are:

  1. Announcement of the successful tender offer which would probably be on or a day after Dec 21 (the settlement date).
  2.  GLO’s acquisition of BTI equity

I am interested in reading the details of what GLO would amend on the terms and condition that governs BTI’s debt.

GREEN

Today’s disclosure on GREEN:

http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-8958_GREEN.pdf

Earthright is to subscribe for P750 M worth of shares of GREEN. The P750M worth of subscription can be rationalized as:

ST1

Of the P750M worth of subscribed shares, 25% or P187.5 should be paid.

Before buying GREEN I did my due diligence by checking all the financial statements of the companies where Antonio Tiu is connected. All of them have cash not enough for them to comply with their investment commitment with Cleantech.

I will wait for more information regarding GREEN before selling.

PNB

When the news came that BPI is in talks to buy PNB, I was asked by a client what to buy: PNB or BPI?

Without hesitation I said PNB. Why? PNB’s majority shareholders are hinting their willingness to sell their interest. A company for sale will attract willing buyers. Willing buyers can offer to buy PNB at its intrinsic value.

How much is PNB’s intrinsic value? After merger with ABC, PNB can have a BV of P57.22 assuming PNB will sell similar to BDO’s price to BV multiple of 1.73 we can value PNB at P99.

We bought him PNB @ 85.

MEG

MEG is the cheapest real estate company in terms of PE ratio in the PSE. It is the cheapest and also the market leader. I guess it is bound to realize its value of 2.90.

I made my client choose what stock he wants to serve as the majority of his portfolio: CHIB, FGEN, AGI, MEG, EDC.

He chose MEG @ 2.20 for the simple reason that it has the lowest peso value. Lucky guy.

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