Philippine Stock Market Research

December 5, 2016

Weekly Stock Market Report and Special Report:  The Best Stocks of 2016 to 2017

The release of all the listed companies’ SEC Form 17-Q shows their detailed financial performances.  We made tables and sorted out the best stocks in terms of profitability, financial condition and valuation.

For profitability, we used EBITDA growth, net income margin and ROIC.  EBITDA growth substituted revenue growth since the drop in crude oil prices minimized some stocks’ (PCOR and FGEN) revenue growth.  For financial condition, we used current ratio, liquidity ratio for banks and interest-bearing debt to equity ratio.

For valuation, we used EV/EBITDA to introduce the valuation to our coverage.  It is takeover value taking into account the earnings the listed companies generate.  Here, the average EV/EBITDA of the coverage is identified as a gauge and barometer.

Of course, banks were separated from companies in terms of financial condition and EV/EBITDA.  After realizing the best stocks in terms of the three criteria, the best of the best are screened out to be used in a superior stocks portfolio.  They are the stocks with high profitability, stable financial condition and bargain EV/EBITDA.

Meanwhile, the PSEi reverses its track, but this is only seen as short term before the major trend continues its course.

Disclaimer

The Coporate News & Analysis 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.