Philippine Stock Market Trading Advisory as of April 5, 2010
The market is on the high-side as of this date. Of our stocks coverage, there are only eight issues that are still trading at a discount to the market. Based on the average one-year yields of major bond funds in the Philippines, the computed PER limit as of this time is 13.3x. Meanwhile, our fixed PBV limit is 1.5x. We recommend the undervalued stocks below for a Long Term Buy and Hold. They are trading below our Blended Multiplier limit of 19.9x and have high margins of safety against sudden negative economic developments.
RCB, UBP, SECB, CHIB and MBT are five of the biggest banks in the Philippines. SECB has the strongest financial condition among the five. ATS is a transport company growing the logistics side of the business. VLL is a low-cost housing developer with a niche on the OFW (Overseas Filipino Workers) market. Lastly, AC is the oldest and biggest conglomerate in the Philippines with interests in property, telecoms, banking and electronics. More than half of its net income stream are from less-cyclical businesses.
The Philippine Stock Market Trading Advisory is solely for information. It should not be constituted as an offer for solicitation for the purchase or sale of securities mentioned. The information herein has been obtained from sources believed to be reliable. Whilst every effort has been made to ensure accuracy, we do not guarantee the accuracy or completeness of the report. All opinions and estimates expressed herein constitute our judgment as of this date made on a reasonable basis and are subject to change without notice. No liability can be expected for any loss arising from the use of this report or its contents. As this is general information, it does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may obtain this report.