PSEi Hits Intra-day All Time High.

Stock	Buy Below	Date Bought	Current Price	Target Price	Average Cost	Return	% Of Portfolio	Div Yield
BLUE CHIP STOCKS
BDO	60.00	Sep 6, ‘12	64.30	81.00	60.10	7.00%	1.83%
ALI	20.00		23.40	22.50	-	-	0.00%
PGOLD	24.00		29.70	30.00	-	-	0.00%
EDC	6.00	Sep 6, ‘12	6.30	8.50	5.94	6.09%	1.96%
TEL	2,600.00		2,760.00	3,000.00	-	-	0.00%
AGI	11.00		14.28	15.00	-	-	0.00%
MBT	94.00	Sep 14,’12	92.45	105.00	94.35	-2.02%	0.24%
PX	-		14.10	24.00	-	-	0.00%
SMALL CAP STOCKS
PHES	0.74	Sep 24, ‘12	0.71	2.70	0.73	-3.32%	95.89%
BHI	0.16		0.15	0.51	-	-	0.00%
CASH						0%	0.09%
TOTAL						-2.94%	100%
PSEi (Since Sep 6, '12)						5.51%

The market hit an intra-day all time high yesterday before plunging in red at the close. Value turnover also increased yesterday as investors tried to chase stocks. Amidst the optimism that is engulfing the market right now, I have a cautious approach on this bullish trend because of the Japan-Sino tug of war, and the US fiscal cliff. Anyway, any dips from the current prices is a welcome development for me as I will be able to buy stocks at my buy below prices.

BDO/MBT – the valuations remains attractive. The banks are an indirect play on the growth of every industry. As such, so long as the country’s economic fundamentals remain intact, banks are deemed to be a safe bet in the current economic cycles. Big banks like BDO and MBT play a crucial role in economic growth of the country. The current age of the population is very attractive for growth.

The only question I would like to know is what percentage do our banks exposure to Europe has? Recent reports said that our banks have ‘minimal’ exposure to Europe banks which is good but I’m not convinced until proper disclosures have been made by banks. A circular coming from BSP compelling the banks to disclose their exposure would be beneficial.

Banks will be required by BSP to report their exposure in the real estate industry starting Dec 31, 2012. This is a good start to somehow control the asset bubble in the real estate. Banks are allowed to loan maximum of 20% only of their portfolio in real estate.Malaya

ALI – the premier real estate developer in the country has valuations way beyond the others. ALI is a league of his own. The current P/E average of the real estate industry is only 10 while ALI treks at a P/E of more than 30. The distance between its competitors is just numbing. ALI has vast land banks which it can tap should the current demand overshoots the current supply of the residential and office units. ALI is at this stage on a very aggressive mode developing one project after the other.

The COA finally approved the Deed of Conditional Sale between Negros Occidental and Ayala Land involving 7.7 hectare of prime property.SunStar It is interesting to see the reaction of Ayala Land this given that they previously told the Negros government that it is engaging from the deal.

One of the good things about ALI is that it is one of the favorite stocks of foreign investors.

TEL – this is like a preferred stock. You get a 6-7% dividend per year with an upside in the appreciation of the stock. Bonds are currently trading at 5-6% which is at the low levels of the range. Analysts expect the interest rates to remain the same or go lower than the current rate in the foreseeable future. As such, I am favoring TEL as a substitute in the current interest rates with an upside of price appreciation. TEL net income expects it to be 37B this year. However, next year could be different as the company expects to hit the bottomline at more than 40B.

It has recently completed its major infrastructure upgrade that will enable it to handle data explosion. TEL still retains its market share in the telecom industry but it is slowly gaining foothold in the VOIP industry. TEL also has access in the information technology and I think this is where the growth of TEL will come. The telecom industry is matured already and growth is limited. The dividend is a testament to that.

PLDT will invest P560M to triple the capacity of its internet gateway- the network facility that handles internet traffic going to and from servers abroad. ^{GMA News}

AGI – together with wholly owned subsidiary New Town Land Partners exercised their right to buy 3.071B Megaworld warrants at P1 per share. Manila Standard

PGOLD – the consumer play. PGOLDs listing last year gave the investors an alternative to URC, SMC, AGI (partially), JFC and others. Indeed, since its listing last year, PGOLD has increased its stores nationwide and is still in expansion mode. It is planning to issue P8B of notes for its expansion.

My friend 'Jeff’ said that he likes PGOLD stores. PGOLD have a store in Arayat and he likes going in there. With this I am with the impression that PGOLD is a good buy but not at this level. A buy on dips is suggested.

If you live outside Philippines, perhaps you may want to check some details on one Puregold store here.

EDC – with all the brouhaha that is happening with EDC e.g. delays in rehab of geothermal machine, management credibility, etc. is an opportunity to buy at a lower price. Once the turbines are repaired and put into operations, the price will go back to its previous level.  

PHES – I’m all in. Obviously I have studied its financials and prospects. PHES is a turnaround company and asset play. The land values being reflected in the books are recognized at cost or NRV whichever is lower. Thus, it is fair to assume that PHES landbank are valued at cost because the Valenzuela property alone would be worth P3.2B at 10,000 per SQM. This will translate into 2.21 per share, a 216% increase!

Now, not all computations and assumptions are absolutely correct. That is why they are called assumptions. However, one must not look somewhere to determine the fair value of a company. 

PX – the permit for the second tailing pond must be secured first. Otherwise PX operation will hang and consequently there will be no revenue for the succeeding years. This permit is crucial. Right now, the hole is a bottomless pit and this stock may go lower until government permits and clearance are obtained.

Philex gets another week to respond to a notice imposing a P1.034B fine for its alleged violation of Philippine Mining Act of 1995 after failing to contain its Padcal mine's waste within its tailing facility.Bworldonline

BHI – The opening of Friday's resort hotel in Puerto Galera has been pushed back to February 2013, according to publicly listed Boulevard Holdings Inc.  (BHI). Hotel construction is now four weeks behind schedule due to inclement weather. ^Abs-Cbn

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

“²⁸Come to me, all you who are weary and burdened, and I will give you rest. ²⁹ Take my yoke upon you and learn from me, for I am gentle and humble in heart, and you will find rest for your souls. ³⁰ For my yoke is easy and my burden is light.” Matthew 11:28-30