A lot of catching up, Free Accounting Course, Stock thoughts: VMC, BEL, MER

A lot of catching up

I have a lot of catching up to do for this blog. Currently, I only have one requirement left to submit for my MBA which gave me some time to do work for the blog.

 

Free Accounting Course

There is an accounting course in coursera right now:

https://www.coursera.org/course/accounting

To those who are interested to be educated by a professor in Penn University. 🙂

Make sure to take notes because you will surely apply it in your stock investing.

 

VMC

When I made a post on VMC, I cited one of the risks of investing in the company are insiders selling specifically CVI and Narra.

A few weeks ago, I was informed that one of the insiders has no plans in selling their VMC shares in the market. So that leaves only one seller to be aware of, sadly I do not know his broker. Lol

Considering that VMC is just a few km away from my home, I can attest that they were doing well.

Looking forward for their 2013 fiscal year report.

 

BEL

To those who are interested, I profiled BEL here:

https://fundamentalenthusiast.wordpress.com/2013/05/23/profiling-belle-corporation-pse-bel/

 

MER

MER had surpassed the intrinsic value of P380. MER will start trading electricity in June, we can expect favorable earnings growth for MER this year.

Learning from Tycoons, Mike Ferrer, Stock thoughts: EDC, AT, MER, VITA

Learning from Tycoons

A good On the Money Episode:

http://www.youtube.com/watch?v=tCUqC766xIM

 

Mike Ferrer

A new column written by Mike Ferrer:

Invisible hand

If there is somebody worth the trouble of subscribing to Businessworld online, it would be Mike Ferrer. He is the president and managing director of ATR KimEng Asset Management.  🙂

http://www.bworldonline.com/assets/subscribe.php?id_subs=digit

P. 2/S3 or p. 22 of the .pdf file.

 

EDC

EDC 2012 core net income* increased by 89%.

http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-1742_EDC.pdf

The reported net income of 9.89 B is only 6% higher than my estimated earnings. EPS to be reported will more likely to be at the same level as presented in the stock report below.

More on EDC:

https://fundamentalenthusiast.wordpress.com/2012/12/01/energy-development-corporation-pse-edc/

*Core net income means net income excluding one-time gains or losses.

 

AT

AT core income up by 46%.

http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-1744_AT.pdf

P2.5B reported income is close to my projected earnings of P2.6B. EPS to be reported will more likely to be at the same level as presented in the stock report below.

More on AT:

https://fundamentalenthusiast.wordpress.com/2012/12/17/atlas-cons-mining-and-devt-corp-pse-at/

 

MER

MER reported consolidated core net income of 17B 7% lower of my projected 18B net income.

http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-1768_MER.pdf

See stock report:

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

 

MER’s dividend policy should come as no surprise. MPI, the majority shareholder, is in need of cash flows. Where do you think they should source additional cash?

 

VITA

You might be interested in this case study:

https://fundamentalenthusiast.wordpress.com/2013/02/25/playing-with-vitas-par/

 

Unemployment, Energy Sector, Ethanol Plant, Stock Thoughts: MER

Unemployment

Social Weather Stations (SWS) estimates unemployment rate at 24.6% .

I don’t get it. If that would be the unemployment rate then should we be at a recession?

National Statistical Coordination Board (NSCB) estimates unemployment rate this January at 7.2%.

http://www.nscb.gov.ph/secstat/d_labor.asp

I prefer to rely on NSCB data.

I am open for any alternative thoughts.

 

Energy Sector

Few take the energy security seriously. In the coming years, assuming the Philippine economy continues to grow; there will be an electricity shortage.

 

How will an individual investor play this opportunity? Invest long-term on stocks that are into electricity trading and electricity generation.

My opinion only.

Ethanol Plant

Gokongwei plans more power and ethanol projects in Negros:

http://business.inquirer.net/108007/gokongwei-plans-more-power-ethanol-projects-in-negros

Gokongwei is planning to do what ROX is already doing. Lol

More on ROX:

https://fundamentalenthusiast.wordpress.com/2013/02/03/roxas-holdings-inc-pse-rox/

MER

MER is seeking for more power?

http://business.inquirer.net/108021/meralco-turns-to-psalm-for-additional-power

Increase in electricity volume sold by MER means an increase in the revenue of MER.

More on MER:

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

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! 🙂

Weird things I often hear, Stock Thoughts: FGEN, EDC, MER

Weird Things I Often Hear

“You told me X stock’s real value is XXX how come it’s still at XXX?”

“How can I buy now? PSE index are so expensive. I’ll buy in the correction.”

“How can I buy now? PSE index are trending downward. I’ll buy at the bottom.”

I find these statements weird. For statement one, a stock’s intrinsic value is not realized instantaneously right after you buy.

For statements two and three, you are not buying the whole PSE, but a company. If the company is trading at reasonably cheap PE ratio what would hold you back?

My opinion only.

 

FGEN, EDC

FGEN and EDC is a pair. Nice to see them inching higher. 🙂

More here:

https://fundamentalenthusiast.wordpress.com/2012/12/01/energy-development-corporation-pse-edc/

 

MER

I am waiting for the regulatory development in June 2013 that would boost MER’s earnings.  🙂

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

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.

Selected stock updates: MER, PRC, AGI, GREEN

MER

This morning, news came out that MER’s credit rating was upgraded by S&P to B+ from BB-.

http://www.bworldonline.com/content.php?section=Corporate&title=S&P-gives-Meralco-higher-credit-grade&id=62110

As a result, MER’s price went up by 3.53%.

My take, MER is undervalued even at current prices. Franchise alone is worth P380/share (See comments section of MER stock report). IMHO, a P300 price before year end is very possible.

Short term investment strategy: Buy and hold until the Open Access and Retail Competition (OARC) which is on the second half of 2013.

Long term investment strategy: Hold 5 – 16 years.

 

PRC

Just as I thought there are no more sellers in PRC, ATR came out with so much more shares. Anybody have an idea when ATR will exhaust all his shares?

 

AGI

AGI confirms their intention to spend $1.5 billion for Resorts World.

http://www.pse.com.ph/resource/disclosures/2012/pdf/dc2012-8586_AGI.pdf

Good news! With the following assumptions:

Return on Assets (ROA) = 5%

Outstanding shares = 10 billion

Forex rate = P 40

The estimated 1.48 increment in its intrinsic value depends on when and how AGI will spend the $1.5 b capex.

 

GREEN

 No news or disclosure except that it’s down 11% from my initial entry.lol