Getting to Know Our PSEI Reserve Stocks: The “Next Blue Chips”

Getting to Know Our PSEI Reserve Stocks: The “Next Blue Chips”

 

Stock Market has a lot to offer in terms of opportunities to grow your money, however, spotting the right stocks with potential growth is something to think and learn. Investing in blue-chips stocks is somehow expensive and overprice. It can also get laggard along the way due to the fact that it may have already reached to its all time high price (resistance area) and it is no longer attractive to the buyers. All you can do is to wait for the stock to go down for you to do bargain-hunting.

 

My goal as an investor is to look for small cap stocks and to acquire them before it gets blue-chip. This is what makes sense to me when acquiring a stock to put it in my portfolio. In Basketball, they are called “bench-players”, in the stock market, they are called “second-liners”. They are reserve stocks.  The growth potential is very promising since they are new players and underrated. Since they are smaller, the supply of its outstanding shares could be easily filled in when demands of buyers came into place. They can easily go up faster than blue-chips. They are also picked to take over once blue-chip stocks will be removed from the list if it falls short from the standard of PSE, take for example (just recently), Puregold which was put in place for Emperador.

 

Double Dragon Properties Corp. (DD)

 

 

Double Dragon Properties Corp., formerly Injap Land Corporation, was established on December 9, 2009 to primarily engage in the business of real estate development and other real estate-related business ventures. The Company started commercial operations in November 2010. DD was originally 100%-owned by Injap Investments, Inc. (IJI), a holding company owned by the Sia family. In June 2012, DD became a joint venture between IJI and Honeystar Holdings Corporation, the holding company of the Tan and Ang families. The Securities and Exchange Commission approved the Company’s change in name to its present one on August 1, 2012.

 

DD and its subsidiaries own, lease, and enter into joint venture agreements covering several tracts of land for community malls, office, residential and other types of developments. As of December 31, 2015, DD’s subsidiaries include DoubleDragon Sales Corp., One Eleven Property Management Corp, Piccadilly Circus Landing Inc. (PCLI), Double Dragon Property Management Corp., DD Happyhomes Residential Centers, Inc., DD-Meridian Park Development Corp., and CityMall Commercial Centers Inc. The Company’s core projects include City Mall, DD Meridian Park, Jollibee Tower, The Sky Suites Tower, Dragon8 Mall, and W.H. Taft Residences. DD also has several projects in Iloilo, namely, Injap Tower, The Uptown Place, People’s Condominium, First Homes Subdivision, and Happy Homes – Mandurriao. DD also entered into a joint venture agreement with the City Government of Iloilo to construct and operate the Iloilo-Guimaras Ferry Terminal.

 

With the powerhouse leadership of Injap Sia (Mang Inasal) and Tony Tan Caktiong (Jollibee Food Corp.), Double Dragon is considered as a growth stock and investors are anticipating positively on their vision. The stock price went up more than 2,000% from its 2 pesos/share IPO price to 80 pesos all time high before declining. Although the P/E is quite expensive for 97x P/E, as they’ve raised funds through their corporate bonds, people are still believing that this could help boost their projects and earnings. Stock price is currently 43.23% year to date and going sideways as it is recovering from previous sharp decline.

 

 

D&L Industries, Inc.

 

 

D&L Industries, Inc. (DNL) was incorporated on July 27, 1971 primarily as the holding company for a group of companies with interests in the customization, development and manufacturing of food ingredients; colorants, additives, and engineered polymers for plastics; aerosol products; as well as manufacturing of oleochemicals, resins and powder coating. The Company also renders management and administrative services to subsidiaries and affiliate companies.

 

The Company has four principal business lines namely, food ingredients, which manufactures a line of bulk and specialty fats and oils, culinary and other specialty food ingredients; colorants and plastics additives, which manufactures a line of pigment blends, color and additive masterbatches and engineered polymers for a wide range of applications, introducing a number of products into the Philippine market and expanding into the export of certain products overseas; aerosols, which manufactures three-piece aerosol cans and components and provides aerosol contract filling and compounding services; and oleochemicals, resins and powder coatings, which manufactures coconut methyl ester, also known as coco-biodiesel, using its continuous-process methyl ester plant. DNL also toll manufactures a range of related products, including insect control, industrial maintenance chemicals, and home and personal care products, among others.

 

DNL is something you need to put in your watch-list. This small cap company is doing good for the past few years.It’s a silent worker and a very good ball handler. The stock price did an exponential growth from 4.30 pesos per share to 13 pesos. It is also growing average 20% per year and on its 3 years long uptrend. Technically and Fundamentally, it looks very promising as it attracts investors as their products are being used substantially in the different consumer sectors. The stock price is up 12.28% year to date and posted its 2.6 Billion annual net income which went up 15.4%. It is on a long uptrend.

 

 

CEBU AIR, Inc.

 

 

Cebu Air, Inc. (CEB), which is an airline company that operates under the trade name “Cebu Pacific Air,” was incorporated on August 26, 1988. The Company was granted a 40-year legislative franchise to operate international and domestic air transport services in 1991. CEB commenced its scheduled passenger operations in 1996 with its first domestic flight from Manila to Cebu. International operations began in 2001 with flights from Manila to Hong Kong. CEB pioneered the “low fare, great value” strategy in the local aviation industry. In 2005, the Company adopted the low-cost carrier (LCC) business model, whose strategy is to offer affordable air service to passengers.

 

On March 20, 2014, CEB acquired 100% ownership of Tiger Airways Philippines, including a 40% stake in Roar Aviation II Pte. Ltd., a wholly-owned subsidiary of Tiger Airways Holdings Limited. CEB currently operates a fleet of 55 aircraft which comprises of eight Airbus A319, 33 Airbus A320, eight ATR 72-500, and six Airbus A330 aircrafts. It operates its Airbus aircraft on both domestic and international routes.

 

It is currently on  16x P/E and going sideways on its trend which is following the course of our index. If you love traveling, then you can add this in your portfolio and you can keep this for long-term. The future of this stock is very promising as it keeps on innovating and competing with the other big players in its industry.

 

 

Robinsons Retail Holdings, Inc.

 

 

Robinsons Retail Holdings, Inc. (RRHI) was incorporated and registered with the Securities and Exchange Commission on February 4, 2002 as Robinsons Holdings, Inc. The primary purpose of the Company and its subsidiaries is to engage in the business of trading goods, commodities and merchandise of any kind. On March 26, 2013, the Securities and Exchange Commission approved the change in the Company’s name to the present one.

 

RRHI conducts its core retail operations in six business segments, namely supermarkets; department stores; do-it-yourself (DIY) stores; convenience stores; drug stores; and specialty stores. Some of the brand names under RRHI include “Handyman Do it Best”, “True Value”, “Topshop”, “Topman”, “Toys “R” Us”, and “Ministop”. RRHI operates its supermarkets, department stores and consumer electronics and appliances stores under the “Robinsons” brand name. In 2015, RRHI, through a subsidiary, entered the coffee shop business with the opening of Costa Coffee shops in several locations in Metro Manila.

 

As of December 31, 2015, the Company has 1,506 stores; 124 supermarkets, 42 department stores, 166 DIY stores, 519 convenience stores, 367 drug stores and 288 specialty stores. RRHI has 12 wholly-owned subsidiaries and 13 partly-owned subsidiaries. The stock price is up 3.03% year to date and is going sideways just like most of the stocks today. It recently posted its annual earning is up 14.3% as it booked 1.3 Billion for fourth quarter alone and 3.9 Billion for the whole year.

 

 

Vista Land & Landscapes, Inc.

 

 

Vista Land & Lifescapes, Inc. (VLL) was incorporated on February 28, 2007 as the holding company of the Vista Group which is engaged in the development of residential subdivisions and construction of housing and condominium units.

The Company operates its residential property development business and commercial property development business through six distinct business units. Brittany Corporation; Crown Asia Properties, Inc.; Camella Homes, Inc.; Communities Philippines, Inc. and Vista Residences, Inc. are focused on residential property development while Starmalls, Inc. is involved in commercial property development.

The Vista Group offers a range of products from socialized and affordable housing to middle income and high-end subdivision house and lots and condominium projects. These projects include Crosswinds in Tagaytay City; Marfori Tower in Sucat, Muntinlupa; La Brea in Fairview, Quezon City; and Maia Alta in Antipolo City, Rizal. VLL also owns 100% of VLL International, Inc., which was incorporated in Cayman Islands.

 

It currently posted its fourth quarterly earnings report. VLL net income jumped 22.2% in the last quarter alone with 1.6 Billion revenue. For the full year, net income grew 12.4% to 7.91 billion.  Current P/E ration if this stock is 7.2x P/E. It is going sideways.

 



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