Philippine Stock Market Trading Advisory as of May 24, 2010
RLC has joined our bargain list of stocks after the PSEi has fallen to the 3,100 level. From PHP15.25 the previous week, RLC is now PHP13.50. RLC has a favorable revenue structure with half of its total revenues coming from steady lease income from its commercial centers and high-rise office buildings. RLC is also a major player in the high-rise residential building segment. Its new projects are the Magnolia Towers in Quezon City and the Signa Designer Residences in Makati City. RLC has strong financials with pre-tax income margin averaging at a hefty 35.2% in the last five years and return on invested capital improving to 6.3% in 2009. Though its debt to equity ratio deteriorated to 1.0x in 2009, quick ratio strengthened to 2.1x in the same period. RLC is a BUY and may not remain as a resident of our list for long.
Rejoining our list is MWC (PHP15.50), and our subject stock last week, GMA7 (PHP6.70), has already joined our list. Choice stocks to watch out for south of the border are SMCB, SM and URC. These index heavyweights are preferable BUYs if they reach bargain levels.
Pymwymi Fund Performance
The Pymwymi Fund is up 15.8% and the PSEi is up 5.8% from the start of 2010. Stocks recommended in forming a Pymwymi Fund at this point in time are AC, AGI, SECB, UBP, CHIB, MWC, FLI, RLC, RCB, GMA7 and VLL.
Note: Philippine Stock Market Trading Advisory Disclaimer Below