My Stock Portfolio

As a stock investor, perhaps you are wondering what are the stocks I am buying. Well, I have bought various stocks already and sold them at a profit. After selling all my stocks before, I purchased again every month and below are the current stocks I have.

Action	Stock Code	Market Price	Ave. Cost Price	% Gain/Loss
BUY | SELL	ALI	15.9000	15.0918	5.36%
BUY | SELL	FPH	60.7000	62.8556	-3.43%
BUY | SELL	MWIDE	11.0600	8.9262	23.90%
BUY | SELL	SCC	214.8000	213.5281	0.60%
BUY | SELL	VLL	3.1800	3.1794	0.02%

ALI - is the largest and most diversified real estate company in the Philippines.ALI is a brand of it's own. A company that sets the benchmark in almost every aspect of real estate industry.

The share price against it earnings is expensive. Investors are willing to put a premium to the price of it's share given it's vast knowledge and experience in real estate. Since the company has 4300 hectares of land bank, it is well position to capitalize on the hot property market in the next ten years. Net income has been growing every year except in Year 2009. 

The net income for the 1st quarter is 1.6 billion pesos and it's well on it's pace to break it's previous net income record in Year 2010. Liquidity is not an issue also because the current ratio is 1.96:1 for the 1st quarter of Year 2011. The debt to equity ratio is also good at .53:1. Overall, ALI has huge cash in the coffers and can capitalize on every market opportunity.

Since the company is growing and with it's steady net income and on it's way of achieving it's 10 billion pesos net income target, it might be beneficial to include it in the stock portfolio.


FPH - this stock is recommended by Bo Sanchez.(by the way, if you want to know his stock recommendation, please click on the Truly Rich Club banner on the right side).


I checked Citiseconline's research on this and below is there analysis on FPH.


Cheap from all angles.  FPH’s is cheap, no matter how you value the stock. At Php57.00,
the stock is trading at a 30.3% discount to its market based NAV of Php82/sh.  It is also 
trading at a very compelling 2010E P/E of 8.7X vs. the PSEi’s 10.5X.  Moreover, FPH is 
currently trading at a steep 28.75% discount to our fair value estimate of Php80.00/sh, 
which is conservative since it includes a 20% holding company discount.  


Cash hoard now secure. FPH will be in a net cash position of Php7.6Bil following the sale 
of its 6.7% stake in Meralco to the Metro Pacific group, based on our estimates. FPH plans 
to use its cash hoard to maximize shareholder value.


FPH could be one of the highest dividend paying stocks this year. After resuming its 
Php1.00/sh cash dividend in 2009, management said it will pay a Php2.00/sh this year. 
Based on a Php2.00/sh cash dividend, FPH’s dividend yield would be 3.5%, making it one 
of the highest yielding issues in the market.


MWIDE - The outlook for the property sector is bright because of the strong economy, growing OFW remittances and skyrocketing tourism. The ties of MWIDE with Henry Sy will ensure billions worth of revenues in the coming years because SM Malls are sprouting like mushrooms everywhere. Also since MWIDE uses high technology in construction (it is the first company actually to extensively use advance technology), it has a big advantage right now compared to Ayala Land and Megaworld. It is also setting up a billion pesos precast manufacturing complex that will increase its production and lead time.


MWIDE is bidding for government projects also this year as it tried to spread the profit from SM to other clients.


SCC - is a defensive company and is not vulnerable from cyclical downturns. It is a great company with competent management. The power plant business is slowly gaining momentum and will realize its full potential in a couple of years. Global demand for coal is soaring coal prices are skyrocketing. Being the only large scale coal producing company in the Philippines, it is well established to capitalize on global energy demand and a rising Philippines expected to gobble up more electricity. As one of the large companies giving a large dividend pay-out, it’s worth including SCC shares in my portfolio. 


VLL - After checking the Price Earnings of other real estate listed in the stock market, VLL is on the bottom part but I believe that sooner the correct fair value of the company will reflect in the market. The recent buy back of the Company and the management's confidence in their own internal processes and financial condition, reflects the company's belief that it's share price is grossly undervalued. The current ratio is very strong, and the longterm debt are manageable. 2011 could be a record year and given the hot property market still soaring, VLL can capitalize on this. It is a cash rich company and it's subdivisions are well known throughout the country.

The ratios and key performance indicators I mentioned above were based from 1st quarter 2011 reports. It's latest financial reports strongly suggests that VLL is undervalued and is currently selling at a bargain.

We Will Ride This Slide All the Way Down!

Two days ago, I bought ALI(Ayala Land) and FPH(First Philippine Holdings). These stocks are going down and may even go down further until the investors will go out of their cave and plunge again in the stock market. The investors are a bit cautious on what is happening in Europe's debt crisis,and US weak economic data.

Even with the underspending of the government in the 1st quarter, our economy has posted a modest 4.9% growth. Actually, the income of the government through taxes, fees, duties, etc in the 1st quarter is bigger than the expenses. We have a surplus in budget. Because of these excesses in the the budget, the government is planning to dramatically increase the spending in infrastructures in the 2nd half of 2011. This will somehow help in achieving the 7 to 8% target set by our government officials.

This month, we have seen the stocks slide down. SCC which I bought at 220, and 214 respectively is now trading at 203. If I am going to sell them today, I will lose money. Fortunately, stock market is just a cycle. A cycle of ups and downs. With the current price of the stocks right now, most of them are trading at a discount. ALI which is selling at 18 plus last month is now selling for 15. The bargain hunters like me are on the hunt and are trying to put up additional funds in this fearful market conditions. I always remember what Warren Buffet said in his book, be fearful when others are greedy and be greedy when others are fearful. Today, the investors are fearful and it's the time to be greedy. Few investors will plunge in because of the uncertainty of the global economy but if you are optimistic on the fundamentals of our economy, most likely you will ignore the noise outside.

The noise outside are what really drives the investors to sell. And we don't blame them because that is a normal reaction when someone invested his money. On the other hand, we must
ignore our emotional swings upon reading one news after another because we might end up in a loss. Yes, stock market winners are people who stick with the fundamentals. People who stick with their own research and thinking. I have seen last Feb 2011 how awful my money in the stock market looks like. If I sold my stocks at that time, I would have lost 20,000 pesos. And yet I stick with my stocks looking very optimistic that the stock market will soon go up. And yes, the wait has paid off. Last April, the stocks started to go up like an airplane taking off from the tarmac. I ended up taking a 40,000 pesos profit when I sold them.
In the midst of May, the stock market is going down again and I am on the prowl looking for stocks being sold at a bargain. Mind you, I am not talking about penny stocks. What I'm looking for stocks are blue chip companies, or emerging companies with potential to become a blue chip company.

I have a great colleague who also tried the stock market. We have been discussing the pros and cons of the stock market before and eventually he decided to give it a try. He bought stocks upon seeing the rising stock market in their own country. In just a few weeks, the stock market in their country went down dramatically. He started to question the viability of investing in the stock market. He started questioning the investors, the traders and the volatility of the stock market. He sold most of his stocks incurring a loss and not bothering to invest again. He said that he will just concentrate in real estate from which I did not object.

First experience in the stock market with a stagerring loss will deprive you with sleep. It will become stressful for you especially if you are just trying to give it a shot. Based on my experience, I would suggest that you buy when the market is down so that when it goes up, you can sell at a profit. This will provide positive feelings that hopefully will translate into a routininary savings in the market instead of the banks. However, do not be carried away by your profit because there will come a time that the market will be in a long downward movement which will require your patience and discipline.

Since I plunge into the stock market and learned the fundamentals, I never stop enhancing my knowledge. Every purchase is a learning experience for me and I take that into account when buying in stocks in the future. With our current state of economy, I am very optimistic in the stock market. Under the Aquino administration, investors are flocking in our economy. We are a money magnet from foreign investors. Our economy is very alive, the government has been ticking the right buttons here and there, and with next five years, the stock market will be on a roll. This will be the best legacy that Pnoy will leave after his presidency.

With the next three years or less, I have a target of how much I will earn in the stock market. I believe it will happen and it will happen sooner. I just need to be faithful in
doing the right thing.

Eight Things You Should Know about SCC!

1. THE EARLY STAGES

Semirara Mining Company (SCC) is a publicly traded company in the Philippine Stock Exchange (PSE). Last July 11, 1977, the Philippine government awarded a thirty five year coal operations to a consortium (association of two or more individuals, companies, organizations and governments with the objective of participating in a common activity  for achieving a common goal)  formed by three private companies. 1977 plus 35 years equals 2012. Thus, on July 11, 2012, the right to operate a coal mining operations will cease. The Department of Energy (DOE) however stated that SCC has the right to renew the contract one year before the expiry date. Since the expiry date is July 11, 2012, I assumed that SCC is now actively filing a truckload of papers to DOE for the extension of the right to mine coals in Semirara (located in the province of Antique, municipality of Caluya.) By the way, SCC has extended its right to mine coal until 2027.

In 1983, the contract was amended between the government and SCC. The government is entitled to receive 30% of the gross revenue less allowable deductions or a minimum of 3% of gross revenue whichever is higher. In 1987 the Company completed the coal mining and started delivering the coals. This coal is different from the uling that we uses in our house whenever Meralco runs out of electricity or whenever a storm or typhoon ravages our country although the purpose is the same which is to produce heat and eventually becomes a fuel source. This coal is undergoing through a process before it can be sold to large scale clients and industries.

The coal prices are lower than anticipated in the early stages and the peso is performing poorly against the dollar making it hard for SCC to pay its creditors and financiers. The European bank who lent money to SCC eventually converted its loan into shares acquiring 40% of the Company’s outstanding shares.

2. DMC TO THE RESCUE

In 1997, DMC purchased the 40% shares of the European creditor and started to hire a new management team for its operations. They also hired expats who are experts in the coal processing industry. DMC eventually increased its shares in SCC to 94% at one point in time. In February 4, 2004, SCC has successfully launched an international public offering. They sold more than 30% of their shares to foreign investors and the company’s ticker in PSE became SCC. SCC was able to pay its maturing debts to creditors and royalties to DOE because of the international public offering.  Moreover, it enabled SCC to buy modern mining equipments after decades of using shovel in extracting coal mines.

3. BIGGEST CUSTOMER IS OWNED BY SCC ITSELF

In December 2009, DMC won the bid for the coal fired thermal plant in Calaca, Batangas previously owned by the Philippine Government.  This power plant uses coal to generate electricity. This acquisition is both a defensive and an opportunistic investment for SCC. It is defensive because the power plant will use the coal of SCC on a long-term basis. Thus, SCC is secured by a long-term contract with its subsidiary.  It is an opportunity also to add additional earnings in the coffers of SCC.

4. THE GREAT POWER PLANTS

The nine months ending Sep 2010 results for the power generation is encouraging. The gross profit of the power plants is 2.2 billion pesos. In just its first year of operations it has generated substantial resources in the vault of SCC. The power plants bought by SCC are not yet operating at full capacity. One power plant is undergoing rehabilitation and is expected to be fully operational next year. This will bring a big upside on the revenues of SCC. Moreover, the company has negotiated for favorable supply contracts from its clients. The contracted electricity is 322 MW which represents 62% of the total capacity of the two power plants. These contracts also include the cost of coal which SCC is selling to its subsidiary. Another power plant is being constructed with a capacity of 600MW. The power plant is expected to be completed on 2^nd half of June 2012. Once all of the power plants become operational and grinding at full capacity, SCCs net income will dramatically go up.

5. GLOBAL SCENES

SCC has clients around the world. In fact, almost half of its coal products are being exported. Thus, any changes in the global scene will affect the coal export. Coal is the major fuel for worldwide generation of electricity. Nearly 40% of the worlds’ electricity is being produced by using coal. In India, US, Australia and Europe, coal is the dominant fuel source of electricity. Experts say that 71% of China’s energy will come from coal. Although a lot of countries are giving emphasis on green energy but this may take a while. In the next two decades, coal will still be the dominant fuel source of electricity in the world.  Recently, the Japanese battled an earthquake and tsunami that devastated the country and its nuclear energy. That disaster took out nearly 9.7GW of thermal capacity. The disastrous effect of nuclear meltdown is scary to people living near the nuclear power plant. Countries dealing with Japan have scrutinized the products coming from them because of fear on nuclear contamination. In effect, Japan’s economy slows down further and its stock market plummeted drastically. People are now questioning the role of nuclear energy and this nuclear issue is giving coal a big boost. In fact, global prices of coal are 33% higher than last year. Since the financial crisis that hits US last 2008, countries are steadily growing and bouncing from a deep low. Consumers spending are rising and infrastructures are sprouting like anything. The rebuilding efforts in Japan will require more energy than ever before. Infrastructures need steel and cement, and production of steel and cement needs coal as fuel source. The bottom line is as energy demand increases and infrastructure projects continue to be created, demand for coal is set to rise and so is SCC.

6. RECENT DOWNWARD MOVEMENT

Recently, when Duetsche Bank lowered the SCC rating from BUY to HOLD, the SCC price plummeted. Duetsche Bank dumped 600M pesos of SCC shares since April 1, 2011. They are one of the biggest holders of SCC shares among the stockbrokers. On the upside, UBS Securities and Citiseconline bought 340M pesos worth of SCC shares. These guys are making the SCC price steady and with their BUY rating, we only hope for the upward movement of SCC because I am hoping Duetsche Bank has already sold all of his SCC shares and are now in the hands of stockbrokers with a BUY rating. I am optimistic that SCC will go up.

March 24 , 2011 - Share price is DOWN at 216.20/share, 1.5 M shares traded, CLSA dumped 400k shares while UBS dumped 360K shares, Citisec on the other hand bought 200k shares.

April 13, 2011 -  Share price is DOWN at 218/share, 2.5M shares traded, 1.2 M shares were sold by Duetsche Bank because of on hold rating.

Apr 19, 2011 - Share price is UP at 213.80/share, 1M shares traded, 450k shares dumped again by Duetsche Bank but Citiseconline bought 290k shares. First Resources and SB Securites bought 300k shares

7. STRONG DIVIDEND POLICY

On May 24, 2011, SCC will pay a 10/share dividend. At its current price of 212/share, your money will earn a 5% yield. SCC also paid dividends in Year 2009 at 6/share. The management has committed in providing strong dividend yield to shareholders and SCC did not disappoint.

FinanceAsia magazine sponsors a yearly poll to determine the best managed companies in each country in Asia.  Each year, the magazine asks investors and analysts wide range of questions about their views on companies' corporate governance, investor relations, dividend policies and corporate social responsibility.  To ensure that each market is represented honestly, the magazine targets regional investors to participate in the poll. On 8 July 2010, Semirara Mining Corporation was among the awardees for "Most Committed to a Strong Dividend Policy."  Since its domestic and international shares offering in 2005, the Company has been consistently paying out cash dividends which is more than the adopted dividend policy of 20% of Net Income After Tax.

8. CONCLUSION

SCC is a defensive company and is not vulnerable from cyclical downturns. It is a great company with competent management. The power plant business is slowly gaining momentum and will realize its full

potential in a couple of years. Global demand for coal is soaring coal prices are skyrocketing. Being the only large scale coal producing company in the Philippines, it is well established to capitalize on global energy demand and a rising Philippines expected to gobble up more electricity. As one of the large companies giving a large dividend pay-out, it’s worth including SCC shares in your portfolio. BUY IT.