Ignore the News!

Stock	Buy Below	Date Bought	Current Price	Target Price	Average Cost	Return
BDO	60.00	Sep 6, 2012	63.80	81.00	60.10	6.16%
ALI	20.00		23.50	22.50	-	-
PGOLD	24.00		29.75	30.00	-	-
EDC	6.00	Sep 6, 2012	6.06	8.50	5.94	2.02%
TEL	2,600.00		2,780.00	3,000.00	-	-
AGI	11.00		14,.24	15.00	-	-
MBT	94.00	Sep 14,2012	92.60	105.00	93.34	(0.79%)
PX	11.00		14.70	24.00	-	-

The Dow Jones succumbed to the bears the other day as the market reacted to the comments made by Philadelphia Fed President Charles Plosser that the QE3 will not do much to boost US growth and employment and it raises the risk of longer run inflation¹.You mean, investors are going to reduce their investments because of a comment? Sheesh!  

Yesterday, the news was: Europe concerns weigh on Wall St. ³Europe woes has been lingering for years already. Are we born yesterday?

The news today is “World stock markets post modest gains as expectations rise China central bank to ease policy². Stock market is just an up and down movement every day. The investors jumped in because China’s easing policy? Oh well…

One of the rules in investing is ignore the news 90% of the time. I am ignoring the news for the stocks we selected if it doesn’t have any relevance to the numbers.

Value of shares traded is P4.6B. Foreigners are net sellers worth P108M today. 

INDEX TOP GAINERS

TICKER	LAST PRICE	%
BEL	4.98	5.96%
AGI	14.24	4.71%
RLC	18.76	2.51%
SCC	223.00	1.36%
SMDC	6.10	0.99%

INDEX TOP LOSERS

TICKER	LAST PRICE	%
PX	14.70	1.21%
URC	65.70	0.61%
JFC	101.40	0.59%
SM	727.00	0.48%
JGS	31.60	0.47%

 

BDO- the foreigners net bought P46M.

ALI- the foreigners net bought a paltry P2M.

PGOLD- the foreigners net bought a paltry P2M.

EDC- the foreigners net sold P13M.

Maybank increased the target price to 7.20 and still a buy⁵.

TEL - the foreigners net sold P311M. The selldown continues…

AGI – the foreigners net bought P160M. The buying spree continues...

AGI is targeting P10B profit this year. Yes, P10B profit not revenues, a 20% increase from previous years⁴. Moving forward, AGI is positioned to capitalize on the consumer centric economy of the Philippines.

Average P/E ratio for the past five years is 11.22. With P10B profit in Y2012, this will translate to 14.39 P/E ratios.

The runup of AGI from below 11 to near 15 is unprecedented with foreigners keeping the stock at a high level. The technicals suggest that AGI is overbought already and that the price may soon go back to sustainable levels.

At this point, AGI is already near its target price and a sell recommendation is being suggested. However, we are still monitoring this stock should it dip to our buy below price of 11 which at this time seems impossible to occur. Our fair value of 15 remains the same.

MBT - the foreigners net sold P54M.

MBT bounced back from its 130 day SMA and a buy signal is triggered. The buy below 94 still hold.

PX – the foreigners net sold P573K. The battered stock still down.

Source: PSE, COL data

¹http://finance.yahoo.com/news/feds-plosser-opposed-risky-qe3-175140348.html

²http://finance.yahoo.com/news/world-stocks-rise-amid-china-091627466.html

³http://www.reuters.com/article/2012/09/26/markets-usa-stocks-open-idUSEAP10RQ0520120926?type=marketsNews&feedType=RSS&feedName=marketsNews&rpc=43

⁴http://www.interaksyon.com/business/43462/alliance-global-eyes-p10-b-profit-liquor-sales-growth-on-six-tax-reform

⁵http://research.maybank-ib.com/pdf/document/EDC_IR091812_2007.pdf

“Men for the sake of getting a living forget to live.” Margaret Fuller

Note: This is not a solicitation to buy. Buy at your own risk.