Philippine Stock Market Research

YTD 2012 Value Stocks Portfolios’ Returns

September 25, 2012

Part of our job is to regularly provide our good MyRA subscribers stock portfolios with value and resiliency.  The PSEi has been generally up in 2012, and we want to compare the performance of stock portfolios we have recommended versus the PSEi and the top three stock funds in the Philippines.  We previously show the returns of our Pymwymi Fund, a fund we made in the start of 2010.  It has more than doubled since then.  Here, we would like to focus on 2012 and how stocks we deem as high in value and resiliency performed in a generally straight-up market performance.

We regularly recommend two stock portfolios.  One is the Value-Stocks Portfolio, and the other is the ELV (Estimated Liquidation Value) Stocks Portfolio.  The latter is made up of stocks with huge bargains/discounts to their asset values.  They are also fewer than the stocks in the Value-Stocks Portfolio.  As seen in the table below, the two portfolios outperform the PSEi and the top three stock funds in the country YTD.  The Value-Stocks Portfolio is remarkably up 52% YTD.  At the start of 2012, they were made up of 20 stocks, while the ELV Stocks Portfolio is made up of just eight stocks.  The top performers in the Value-Stocks Portfolio are RFM (234%), EEI (140%) and CHI (107%).  They’re all part of our third-liner coverage …fortunately.  We’re glad that we do the extra effort of screening all the stocks in the PSEi for value.  There are also laggards namely PHN (-12%), SMC (-8%) and COAT (8%).  Laggards in the Pymwymi Fund before became future winners.  That is hopefully what we want out of the three laggards.  The yields do not include cash dividend yields.  The Value-Stocks Portfolio’s cash dividend yield YTD is close to 2%.

We mentioned that this is a regular exercise, and the table below shows the performance of the stock portfolios we have recommended over the months versus the PSEi.  Again, the Value-Stocks Portfolios over the months have remarkably outperformed the PSEi, while the ELV-Stocks Portfolios have generally outperformed the PSEi.

These observations are for a straight-up performing market.  We previously documented the performance of value stocks in a straight-down market back in 1Q10.  They have been more resilient than the PSEi back then.  In a volatile market back in 9M11, value stocks lost to the PSEi, but when the market rallied in 4Q11, the value stocks returned with a vengeance against the PSEi.

What can we summarize here?  Well, for one thing, it is better to have not a few, but a lot of stocks in one’s portfolio.  15 to 20 seems to be a good number from experience versus 200 plus stocks in the PSE.  Even though they’re not super-cheap like ELV stocks, value stocks still prevail, and prevail they do as a group.


The Philippine Stock Market Research report 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.