Blue Chips Stock Portfolio
| Stock | Buy Below | Current Price | Target Price | Actual Price Bought | Actual Return |
| BDO | 60.00 | 61.05 | 81.00 | - | - |
| ALI | 18.00 | 22.40 | 22.50 | - | - |
| PGOLD | 24.00 | 28.50 | 30.00 | - | - |
| EDC | 6.00 | 5.98 | 8.50 | - | - |
| TEL | 2,400.00 | 2,740.00 | 3,000.00 | - | - |
| AGI | 11.00 | 11.78 | 15.00 | - | - |
In the month of ghost (Chinese calendar), stocks normally are stagnant or are being disposed off. Thus, bargain hunting is imminent because we can buy stocks at cheaper prices. Among the selected blue chips, only EDC can be bought now.
I haven’t bought anything yet actually. I’m still waiting for my documents to reach COL’s office and their approval. Once my daughter’s application is approved, I’ll start to buy the above mentioned stocks.
BDO-the banking arm of the Henry Sy companies. It successfully issued an SRO in the market boosting its capital adequacy ratio. This SRO has put the bank in a more a aggressive position to capitalize on the PPP projects.
ALI – the favorite of the foreigners. This company is being traded at premium. It has a high P/E ratio if you compare it against other real estate companies. Recently, the company has embarked on an aggressive land banking taking the FTI district from the government and negotiating with PHES for a joint venture in 60 hectares of land in Valenzuela.
PGOLD – our consumer play. It looks solid in the late twenties price level. Net income grew 32% for 1H to 1.033B pesos. It now has 134 stores operating across the country up from 100 stores last year. We remain bullish on the consumer story of the Philippines as the economy grew faster, OFW remittances growing, and inflation at a stable level. Philippines GDP is driven majority by the consumer sector.
EDC – the machines are delayed again. EDC has been experiencing credibility issue on its announcements made before regarding the motors it sent to UK for repair. Whether the generator rotors will be delivered on time remains to be seen. Nonetheless, the company earned 5.7B pesos for the 1st half 2012 while last year it incurred a loss 2.3B pesos in the same period. I believe any reduction in price from EDC below 6 is a good time buy with the benefits to be reaped in 2013 and onwards.
TEL – it’s still within the 2,700 level. Whether this price will continue at this level remains to be seen. September hasn’t been good for stocks so we will see if TEL will go down below our buy below price. Its 1H net income of 18.7B billion is on track to meet the managements 37B expected income this year.
AGI – with the current price action of AGI, it will be prudent to wait for it to go below 11. Hence, we are revising our buy below price from 12 to 11 to maximize the buying of undervalued stock. Megaworld and Emperador continue to deliver growth for the conglomerate while Travellers is in slump. Nevertheless, it is still a buy until this point. Its net income of 8.41B pesos is higher by 33% compared to last year.
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