Good evening guys!
Finally, a good news from Bloomberg! The report was already out on Friday, Nov. 12th but the market only reacted today.
The PSE index started negative at the opening of the session as it slid down to as low as 4,062, then reversed at around 10 AM and gained momentum until the closing. The index closed positive for the first time after a 6-day decline, at 4,139.32, up by 62.64 points from Friday’s close. The most active stocks were led by TEL, SM, AC, CEB, AGI, EDC, AP, MBT, BDO and MPI.
What’s the fuzz all about anyway?
As reported on Bloomberg, the Philippines’ debt rating was raised to the highest level in more than seven years by Standard & Poor’s, spurring gains in the peso and government bonds.
“We have upgraded the Philippines based on its steadily improving external liquidity profile and underlying strengths of its external accounts,” S&P said. “The upgrade also reflects the progress achieved in debt reduction and the underlying fiscal consolidation.”
I have a feeling that this will be a prelude for foreign investors to buy blue chip stocks and make way for another bull run before we end the year.
To add up to the good news, I have compiled the 3rd quarter earnings report of various corporations which I got from Citiseconline and various news sites. For long term investors, this report will help in choosing a fundamentally sound stock.
3rd Quarter Earnings Report:
1. ABS-CBN (ABS) – increased 18.7% to PhP 636Million on higher revenues driven by strong traditional advertising.
2. Filinvest Land Inc (FLI) – income grew by just 2.9% due to higher expenses and higher effective tax rate.
3. San Miguel Corp (SMC) – earnings surged 358.6% to PhP6.42 Billion, boosted by the first time contribution of its power business and continued growth of its core operations.
4. Digital Telecoms Phil (DGTL) – net income more than doubled to PhP705 Million. Driven by significant growth in the wireless and wireline data segments, partially offset by weakness in the wireline voice segment.
5. JG Summit Holdings, Inc (JGS) – net income jumped 111.4% to PhP5.02 Billion. Earnings growth was driven across all major subsidiaries, particularly in Cebu Air and Digitel.
7. Jollibee Foods Corp (JFC) – earnings rose 32.6% to PhP 712 Million due to higher revenues and slight margin expansion. Revenues climb on store additions and higher same store sales.
8. Aboitiz Equity Ventures (AEV) – core earnings rose 116.7% year on year to PhP5.03 Billion, driven by higher profits across all business segments except for transport.
Source: CitisecOnline
6. Alliance Global Inc. (AGI) – net income of PhP 7.55Billion, a 63% Year on Year increase.Property arm Megaworld Corp. (MEG) accounted for 42% of earnings while non-real estate businesses consisting of consumer food, beverage and integrated tourism projects accounted for 58%.
Source: BusinessWorldOnline
As promised on my yesterday’s post, we will now do some bargain hunting!
I’ve scanned the stocks using ChartNexus’ screening tool where the prices are near the 20-day low and with a stochastic bullish crossover. I’ll also factor in the earnings report above to combine the fundamental analysis with technical analysis, though many might disagree since the two methods are “not meant to be together.” Regardless, my recommendations are just what I see on my charts, I might be right or might be wrong so please take some caution in choosing stocks. Your decision is not my decision.
Below are my stock picks for tomorrow. (EP-Entry Price, TP: Target Price)
BDO - EP:58 TP:64
DGTL - EP:1.64 TP: 1.78
EDC - EP:5.7 TP:6.55
NI - EP:3.45 TP: 4.10
SMPH - EP: 11.88 TP: 13.16
MPI - EP:3.88 TP: 4.44
MEG - EP:2.60 TP: 2.84
FGEN - EP: 13 TP: 15
LPZ - EP: 5.45 TP: 6.6.
Below is the chart for Lopez Holdings Inc. I see a bullish hammer formed last Friday with the other conditions met (price-low and stochastic crossover). There’s a resistance at 6.6 so that will be our immediate target price. LPZ will benefit from ABS-CBN’s earnings since Lopez Holdings is its parent company.
FYI, another IPO brewing!
SM unit’s contractor preparing to go public, eyes more than P2B. MEGAWIDE Construction Corp., which claims to be the largest local contractor, wants to go public to raise P2.29 billion to fund projects next year. Details on BWorldOnline.com
Ok, that’s it for now, tomorrow, is another day to look forward to.
S&P logo from Embassy of Indonesia
Update:
No trading day today. Malacañang has declared November 16, 2010, a non-working holiday, in the observance of Eid’l Adha.
The index closed at 3,530.49, down by 82.88 points. Read more on 
