Stock thoughts: PAL, PNX, MER, LPZ, FGEN, TA, PRIM

PAL

An example of par reduction that would not result to increase in number of shares:

http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-0787_PAL.pdf

PAL decrease the amount of authorized capital while maintaining the number of shares:

Current par = P 16B / 20 B shs = P.80

New par = P 4B / 20 B shs = P.20

 

PNX

Many weeks ago, somebody gave me a heads up on this stock regarding their consistency in declaring stock div.

2012 – 50%

2011 – 30%

2010 – 40%

2009 – 40%

2008 – 30%

And now, 30% stock div:

http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-0788_PNX.pdf

Congrats! 🙂

 

MER

MER attaining its short term valuation of 300.

More here:

https://fundamentalenthusiast.wordpress.com/2012/11/10/manila-electric-company-pse-mer/

 

LPZ

Wohoo! LPZ realized its value of 7.35. Oh yeah!

Sold all at 7.35 (not my own account)

 

FGEN

Finally, somebody is seeing the value of FGEN. 🙂

 

TA

Adjusted short term valuation of TA of 1.60 is reached.

Back-of-the-napkin calculation here:

https://fundamentalenthusiast.wordpress.com/2013/01/02/fiscal-cliff-stock-thoughts-agi-ta/

 

Not-so-back- of-the-napkin calculation here:

https://fundamentalenthusiast.wordpress.com/2012/10/29/investing-in-trans-asia-oil-and-energy-development-corporation/

The funny question is why did I not buy TA for my personal account if I know its real value?

Answer: I fell to anchoring bias. 🙂

A way of thinking influenced by anchoring bias goes like this: “TA has gone up 30%, it should go down and it shall be the best opportunity to buy if it happens.”

I based by decision to a known fact (30% increase) that has no bearing to my decision.

Proper thinking should be: “TA is still undervalued at 1.30, if its short term value is 1.60 then I can still expect 20% return.”

More here:

http://www.investopedia.com/terms/a/anchoring.asp#axzz2JQgGLGr1

My mistake, charge to experience. 🙂

 

Now, why will I not buy TA if I know its long term value is 2.13?

I REALLY find my current holdings undervalued….. too. Lol

 

PRIM

Talking about speculation, PRIM stock price soared ahead of its extension of corporate life:

http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-0955_PRIM.pdf

The thesis is that the market will speculate as PRIM will extend its corporate life. The majority shareholders may change the purpose of the company from banking to media.

PRIM is majority owned by MVP group so there is a possibility that TV5 will be listed through this stock.

Heard about this since last year but had no liberty to share since the idea did not originate from me. Now, the person who told me about this is taking his profits. Congrats! 🙂

Stock Thoughts: GREEN, FGEN, EDC, LPZ, TA

GREEN

More idea on how GREEN can generate additional revenues from its renewable energy projects:

http://www.bworldonline.com/content.php?section=Economy&title=Sale-of-carbon-credits-urged&id=63972

More on RE2Grid:

http://www.climatebusiness.net/carbonergy/re2g_press_release_1__rev.pdf

 

FGEN and EDC

I expect FGEN and EDC to go higher should Bacman geothermal power plant go online.

 

LPZ

No news but LPZ’s stock price reached P7.  I’m waiting for GLO’s move.

 

TA

I have this weird feeling that TA’s price will go down on Monday next week.

Just a feeling.

What I learned, Stock Thoughts: PSEi, MER, TSI, GREEN, LPZ

In my experience in the stock market I realized that what I needed are:

  1. Research and analytical skills (included here is good interpersonal skill)
  2. Portfolio management
  3. Managing psychological responses

As we go on in the years to come and look back to what we are doing here now, we will marvel on how much we had improved.

I am a humble student of the stock market (and forever will be) and I will look forward on hearing your thoughts regarding your learning and experiences in the stock market. 🙂

 

PSEi

Just yesterday the market was saying that they do not mind the high PE ratio because Philippine companies have promising growth potential.

Now it’s saying that the market is trading at high PE multiples and should correct.

My guess is that when it is going to be red on Monday, market would say that it is down due to fiscal cliff woes.

Mr. Market, Mr. Market, Mr. Market

 

MER

Battered to as low as 258. I find it unreasonable.

 

TSI

Backdoor rumor!!!  lol

 

GREEN

New Directors!

http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-9020_GREEN.pdf

http://www.pse.com.ph/resource/corpt/2012/GREEN_23A_12142012.pdf

Google them, they appear to have the wealth of experience.

 

LPZ

Price action does not worry me a bit.

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.

Love 24/7, Stock update: GREEN, LPZ

I watched Love 24/7 this weekend. Love 24/7 is an interview of different people about what they will do if the world ends. The movie then concluded that all that matters is love. That if the world ends, it would always be the time spent for your loved ones that will matter.

Agree?

I STRONGLY AGREE! If the world ends, we should forget our stocks and just be with our closest and wait for the world to explode. If the world ends, all the assets in the world that has the capacity to generate future cash inflows will not matter because there will be NO FUTURE for all of us.

BUT the world will not end. The world will keep on changing and we need to work to put food on our table tomorrow and in the years to come. Love is important but it is not the only thing that matters. Balance is important.

In investing, most investors see book value (BV) as the company’s intrinsic value. Seeing a company’s value through its BV is viewing the company DEAD. A company that is dead has NO FUTURE. There is no need of using the Price to Earnings Ratio (PER) in valuation since the company will be dead anyway.

A company that is alive grows its book value.

Example:

JFC’s BV in 2008 @ 14, in 2011 @ 19

JGS’BV in 2008 @ 11, in 2011 @ 21

To illustrate, if company A has a book value of P1 today and currently selling at P2, is it undervalued or overvalued?

If you view it dead, it is overvalued.

What if I say that Company A is projected to grow its book value to P5 in 5 years? is it over or undervalued at P2?

Probably you’ll think twice whether it is under- or overvalued. You’ll have to consider PER and all other financial tools.

BV is important but it is not the only metric that matters. Balance in considering other financial tools is important.

LPZ

Courtesy of Zepol, check this out:

http://manilastandardtoday.com/2012/12/10/globe-bayantel-tender-offer-98-complete/

In the last paragraph:

“In the event that the debt offers are completed, Globe intends to apply with the rehabilitation court to amend the terms of the rehabilitation plan in the interest of assuring Bayan’s long-term sustainability. Globe expects that the debt will remain subject to the jurisdiction of the rehabilitation court after the completion of the debt offers,” Globe assistant corporate secretary Marisalve Ciocson-Co said earlier.

What could the amendments be?

Below is my thought flow chart for LPZ:

ST01

GREEN

I will be waiting for a PSE disclosure regarding the result of special stockholders meeting on December 11 or December 12. Trading halt probably? ahahaha wishful thinking.

Emotionless or Just Rational? Stock updates: LPZ, GREEN, APX

Check out how Roger Federer plays tennis:

http://www.youtube.com/watch?v=xNPaZj4yn00

He is considered the best tennis player of all time. Notice how calm his face was during the game? How do you describe him? Emotionless or rational?

I tried imitating Federer’s “emotionless” state in playing tennis but I always fail to do it. My emotions burst out of me every time I made an erroneous stroke or get frustrated on my serve. But in one practice game, I realized that by just focusing on the proper form I can manage to have the state that I am after. Emotions are signals that the body sent to the brain to signify something and therefore should not be suppressed but rather understood. I am not being emotionless in the game, I am being rational.

In investing, stock market gyrations do not affect me because the prices of my stocks will not affect the business of the company I own. If CHIB’s stock price decline by 20%, it does not mean that CHIB will stop doing business. Emotionless? Just rational.

I understand that others view the stock prices as signals. If CHIB declined 20% then there should be something bad. In order for you not to panic in times like that, you should do your own tons of due diligence.

 

LPZ

Finally! We can now be certain that GLO’s tender offer will be successful!

http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-8848_GLO.pdf

The successful tender offer is only the first step of our speculation in LPZ. After GLO’s successfully purchase BTI’s debts we can sit back, relax, and wait for GLO’s future move.

So what if GLO buy LPZ’s BTI?

Then LPZ’s balance sheet will then be free of P8 billion debt or an increase in book value of P1.85 and earnings will increase by P.04.

More here.

APX

APX shows off their disaster preparedness:

http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-8844_APX.pdf

It means that APX’s operation and assets are well protected from natural calamities. Good news! But I want the resource estimates. lol

 

GREEN

THEY HAVE A NEW CORPORATE WEBSITE!

http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-8853_GREEN.pdf

And it does not mean anything for us speculators. lol

Wohoo! December 11 is next weeeeeeeek!!! 🙂