The League of Superstocks for Long-term Investors

The League of Superstocks for Long-term Investors

 

One of my hobbies eversince I was young  is following hollywood superhero movies. As a matter of fact, some of these characters has been my favorite imaginary figures I’ve look up to until today. I’ve been also fascinated with films created from DC or Marvel comics and they’re really good to watch over and over again (of course with all the sophisticated graphics and visual effects and all that).

 

As a writer, I’m also fond of creating reviews out of these amazing characters from great series and movies that have made a mark to the viewers. Having said that, with the movie release of  Avengers:”Infinity War” in the Philippine cinemas this coming month, I’ve also tried to come-up with a superhero team from the stocks in the Philippine stock exchange (PSE)

 

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If you are a fan of Game of Thrones and you’re an investor at the same time, you can also read my previous blog: 15 Pinoy Stocks that will make you believe Game of Thrones is real. 

 

 

 

 

MERALCO – CAPTAIN AMERICA

 

If you are building a team of powerful superheroes, everyone needs a Steve Rogers. Whether he’s leading human soldiers or superhuman heroes, Captain America will succeed at a given task and makes job assignments accordingly. He stands for integrity, he is strategic, and a time-tested leader. 

 

Like Captain “A”, a leader in country’s distributor of electrical power, Meralco (MER) is Metro Manila’s only electric power supplier. It has the largest market capitalization among Philippine-listed utility and power sector companies. Now it is on its 115th year in the energy service and it has been in the country for a long period of time.

 

 It will be the main beneficiary of rising power demand in the country brought about by faster GDP growth. It’s long term profit outlook remains bright with the expansion of its power generation holdings. 

 

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If you are diversifying your portfolio, it is wise to have it as one of your signature stocks. It is one of the defensive and performing stocks in the index for the past few years and it’s also known for its high dividend yield. Furthermore, a stock worth the wait is a company that is continuously providing people’s daily needs for decades.

 

Moreover, it is still top in the utility business and has been giving an average of 5.38% dividend yield for the last five years. P/E ratio is 17.98x which is closer to the Philippine index’s P/E (also one thing to consider). Technically, it has been on a long-term uptrend and has been up by 30% for the last 5 years as of yesterday’s close of business. It is also second on the list with highest foreign buying since 2017.

 

 

MEGAWORLD- WONDERMEG

 

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Who wouldn’t recognize the bad-ass girl named Princess Diana aka Wonderwoman who has been putting us all in awe? She is one of most famous superheroes and she is definitely the real deal. She can withstand considerable huge damages, strong as the earth with superhuman stamina, she can heal fast and she does possess self-immunity. Marvel comics also defines her facial feature as a beauty beyond compare. Above all these, Wonder woman is authentic when she leads and committed when she  follows.

 

The Wonderwoman’s stock market version is Megaworld (MEG). If you are not convinced yet, try to visit in Mckinley Hill in BGC and prepare to admire The Venice Grand Canal and some other structures. It is so beautiful with a state of the art designs hand-made by the best team of architects in the country.

 

 To date, the company already has 21 integrated urban township developments across the Philippines such as; Eastwood City in Quezon City, Newport City in Pasay City, McKinley Hill, Uptown Bonifacio and Forbes Town Center all in Fort Bonifacio to name few spots of their projects. 

 

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Megaworld is the leading real estate developer in the country and No. 1 business process and outsourcing (BPO) office developer. It emerged as the best in the industry, having their projects that are aesthetically pleasing, sustainable and environment friendly. The company in the past year has excelled in producing some of the industry’s best designs and commercial development, earning the distinction of one of the best in its sector. 

 

Fundamentally, I like Megaworld, current valuation is 12.14x PE which is already considered an undervalued superstock. It has net income growth of 10.93% and a sales or revenue of 4.07% year to date. It reported 12.36% net income on its last earnings report. On a technical aspect, it is on a 5 year long-term uptrend, up by 52.18% since 2013. It is also one of the highest foreign buying since 2017. 

 

 

Universal Robina Corp.- URC

 

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We know all about Batman. It’s a fact!  But, how many gives credit to his best sidekick Robin? I believe that with all the recognition and accolades Batman gets, Robin deserves a portion of it. I also firmly believe that Robin makes Batman better.

 

He is heroic, noble, kind, selfless and with a young spirit. But despite his limitations, he has time and time again proven to be a great leader. Early in his life, he was trained by and served as a sidekick to Batman. Later, he became one of the five founding members of the Teen Titans.

 

If Batman has a Robin, JG Summit Holdings has Universal Robina Corporationboth John Gokongwei’s premium companies under his large business empire across the country and abroad. URC operates its food business through operating divisions and wholly-owned or majority-owned subsidiaries that are organized into three core business segments, namely, branded consumer foods, agro-industrial products and commodity food products. 

 

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Indeed, it has built three strong regional brands over the years; “Jack ‘n Jill” for snack foods, “C2” for ready to drink tea, and “Great Taste” for coffee, with these brands becoming popular across the ASEAN region. Now, it’s looking to add Griffin’s and Nice & Natural in its mega brands. URC’s key to success is to build very strong branding through a robust product innovation pipeline, consumer-centric marketing and world-class manufacturing and supply chain management. 

 

After falling short during the first three quarters in 2017, URC’s net income for the fourth quarter finally increased by 5.6% to 2.5 Billion. Analysts and shareholders are all eyes for the first quarter earnings report this year to check if it continues recovering.

 

Even so, with the threats and competitions all around, URC remains to have a positive business outlook. It is currently at 46.07 RSI and on a downtrend. Holding this stock for the long-term can add opportunity for good return once this superstock recovers. 

 

 

 

BLOOMBERRY-SuperBLOOM

 

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Superman is what every little kid wants growing-up. He is one of the most powerful known superheroes. He has some of the most extraordinary powers  but besides his heat vision, super strength, super-speed, and flight, he has some other insane capabilities as well. Over the years, he has consistently made a name for himself; the man of steel, extraordinary and a savior yet gentle and vulnerable.  

 

Another superman-type stock has emerged lately, Bloomberry Resorts Corp. (BLOOM), is the leader in the Philippine gaming sector. It owns and operates Solaire resort and casino which is one of the four license holders in Entertainments City. It is currently the leading integrated resort in the Philippines.

 

As Solaire has the most revenues among the four integrated resorts and while the local gaming sector is still in a growth phase, Bloomberry is a main beneficiary of the trend.  Bloomberry Resorts corporation develops tourist facilities, casino entertainment, and hotel and amusement-themed projects.

 

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On the fundamental side, Bloomberry displays outstanding consistent earnings and it remains as one of the strongest superstocks since last year. It is currently up by 390% since 2016 and is likely to continue until the end of the year. It is also the number 1 on the list that has been bought by foreign investors since 2017 to date. 

 

Price over earnings ratio is around 23.52x P/E. BLOOM reported consolidated gross gaming revenue grew 17.5% during the third quarter to 11.61 Billion and sales revenue growth is up by 22.37%. Current trend is still on the uptrend with minimal declines even though the general market is currently down. Future outlook for this superstock is very strong. 

 

 

 

East West Bank- BLACK WIDEW

 

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Black widow is poor man’s Supergirl. We know the fact that she does not possess any superhuman strength, she can’t fly and she does not have extraordinary weapon but it does not limit her on what she can do. She still the best on any human level. I would definitely pick her as one of my team. She’s underrated yet she delivers and she can fight hand in hand with other superheroes.

 

One of the underrated superstocks in the country is East West Bank (EW). It is a medium-sized universal bank which primarily offers banking services to retail and mid-market corporate clients. East West is the 13th biggest in terms of assets and 12th in terms of total deposits. Its principal products and services include consumer loans, deposit products, corporate banking, treasury and trust products, and cash management solutions. As of end March 2017, the bank had
293 Billion in resources, 204 Billion of which are in loans.

 

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In 2016, earnings have finally reached net income growing up to 70%. Meanwhile, cost to income ratio improved to 54% from 64% in 2012. East West booked 1.4 Billion earnings during the fourth quarter of 2017, up by 27%. This brought the full-year earnings to 5.1 Billion, higher by 48%. It only has 9.03X P/E ratio which considerably very cheap and undervalued among other stocks in the banking sector. 

 

Speaking about technical analysis, it has currently broken-out from its short-term downtrend. Current support is 50 MA. Likewise, if it continues to give outstanding earnings starting the first quarter this year, it will drive its price to the new stock price highs. It is definitely a superstock in the making!

 

 

 

 

Ayala Land- ALIman

 

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A team without Iron man is a team missing a big piece. He is one of a kind and he is a natural leader. He knows what he can do and he knows his limit. He’s one of the wealthiest among others and he took advantage of it by building a super team The Avengers. He is self-less, dedicated and he utilizes his influence and resources to protect humanity. 

 

Unarguably, like Iron man, Ayala Land is still the leader and a top in the industry. It is the most diversified property company as it has a wide range of product offerings – residential, office, resorts, hotels, retail, commercial lots, catering to all segments of the market, with a very wide geographical footprint. As well, this makes it the most complete property developer and its diversification across product segments and geographical presence makes it one of the more defensive ones. 

 

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After achieving its previous five-year plan one year ahead of schedule, Ayala Land is now working towards its 2020 net income target of 40 Billion. They plan to achieve this by aggressively growing its recurring income business, which include malls, offices, and hotels and resorts and to triple their capacity by 2020. So far based on the projects under construction and those to be launched, ALI is on track to reach its capacity targets.

 

 Therefore, P/E ratio is currently at 23.46x PE. ALI reported net income grew 28.2% to 7.5 Billion for the fourth quarter of 2017. It is currently on a short downtrend along with other blue-chip stocks. However, it is on a long-uptrend for the last 5 years, up by 54.13% since 2013. For the long-term, this is still one of people’s favorite superstocks. 

 

 

Do you like to learn more on how to pick Superstocks? Read my previous article: How to invest in the stock market the lazy way. 

 

DO YOU WANT TO LEARN TECHNICAL ANALYSIS? FUNDAMENTAL ANALYSIS? CANDLESTICKS AND CHART? 

 

Book me a one to one session and let me coach you: text me 09369280089 or send me an email palengkekid@gmail.com

 

 

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