Monday, September 23, 2013

Pick of the week for Week 39: MEG

Im banking on the sufficient probability that we are on an uptrend however small (could be just +5% of current PSEi level today or 6800) and however short (could be just until last part of October when anxiety of tapering will prop up its ugly head again).

If we are on an uptrend MEG must catch-up with ALI and other properties that are currently showing strength. Indeed, MEG has already jumped 18% from its 2.9ish low last August, but it's current P/E is just 11--still very cheap compared to its peers SMPH and ALI. MEG should have more juice left--Im projecting 3.75ish in the next 2 weeks, but I'll be selling starting at 3.65. 

Im also watching JGS, which was also a previous stalwart, but was clobbered by Forex losses in a recent earnings report. Now that PhP is gaining against the greenback (or greenback is weakening against all currencies in general), the real performance of JGS should come to the fore. 

It is also reasonable to expect JGS returning to at least 42 PhP, which is its level when our index was 6800. Today's price to 42 is 10%+ difference, so this issue might be good for a 'short term,' high single-digit percentage profit. But still, dont go all in, invest in tranches and average down even up to 45 if it goes down that low.

There are also "Dark Horse" picks like

ANS--should be announcing hefty dividends in the the next 4 weeks.
FDC--hasnt recovered yet, but its subsidiaries are already gaining ground.
LC--for its short-term behavior, a bet in LC is a bet in Gold increasing.
Gold, as most other highly-traded commodities, is expected to increase given the interim "taper-off"(taper removal). LC almost always follow the trend of gold, at times as immediate as the following day. If Gold jumps 3 consecutive days, for instance, LC must jump accordingly.

But FDC and ANS are illiquid. And LC is notorious for its volatility and general 'danger' (this company is almost direction-less until the future of mining in the Philippines is straightened out). Bet on any of these three if only you are that kind of person that loves 'playing,' and you would have time to monitor the price movement daily and closely. Do not hold, especially LC, for too long. 

No comments:

Post a Comment