Pick of the week for Wk40 is GLO at 1600

Any one maintaining a respectable portfolio should be always on the lookout for good price entries in TEL and GLO. These two firms maintain a virtual monopoly in the country. And if any of the two dips down after you enter, even if the hit is by negative 10%, it's still ok to average down given the high dividend yield both gives year on year.

In the case of GLO, three foreigners are dumping for some reason. They must be realigning their funds to another 'hot stock' they are training their guns on, rather than abandoning GLO because of a real problem (say on business fundamentals) specific to GLO. And so it's an opportunity to get in for me.

I already entered one tranche today, and then placed a respectable bid size at 1600.

Now, back to work.

Bull!? And what to do?

For posterity, Im writing here that our index reached a record high yesterday. Although it promptly went down due to profit-taking by both locals and foreigners, the uptrend indicator is strong.

I like the now vigorous foreign-buying in AGI. I'll hold even the block I freshly added this week.

I dislike that I dont have MEG anymore. I thought and was hoping it will go nearer for 4, so I can buy again there, but it just surged strong from 4.3. Ah, it's true that any respectable PSE portfolio should have a MEG.

Another perennial favorite (but I dont have at this time) GTCAP also surged to record highs, even with a disclosure of decreasing net income. Growth must still be foreseen in this conglomerate, armed with news from insiders. Im reluctant to enter at this 100+ level, in any case, unless I have that solid info that portends growth.

In any case, what to do right now? What should guide our general moves in the PSE?

Technical Analysts will say that the uptrend is very much intact. That we are in a bull market definitely with the appropriate moving average line above above where it should be above.

But where specifically to place your bets at?

I'd say buy-up and add to a fundamentally-solid issue already thats in your port. Buy up on that stock you have already studied in the past as having promising growth for the next three years. Buy in tranches still, since this might be a reluctant bull.

If you want specifics, Im sticking to the pick of the week.

For 'entertainment,' Im also tempted to go Bazura for short term ... like ELI... one remaining Dr. Tan stock that still hasn't increased enough. For the intermediate period, Dr. Tan should just fold this inside MEG. The only question is at what tender offer?

ELI is not a reco though. Choose your own bazura to gamble in for entertainment. Choose your own Bazura only if you have time to monitor the market.

Pick of the week for Wk39 is AGI (especially if it breaches 26 strongly)

I like my chances in this better diversified conglomerate ("better diversified" as opposed to SMC, for example).

The previous post about how A Tan looks at the different pieces of his conglomerate as complimenting each other adds value to the whole issue.

And at 14 forward P/E, it is also a bargain today.

Further, if it breaches 26 strongly, the TA believers will interpret this as start of recovery. They will come in droves

Enter one tranche, if you wanna be safe.

About PSEi threatening 7400 (two weeks ago), TEL, and unsureness

I've sold my last holding that was showing double-digit gain two weeks ago. Ive been able to harvest that one big winner, TEL, because Ive been holding and averaging down on it even when the issue dipped down to 2600 levels last year.

I began selling when it threatened 3K earlier this year, when I thought it will hit a big resistance. I continued to sell in tranches until just a portion remained. Of course, if I had insider info that TEL will benefit an MSCI rebalancing, I would have held all and then sold in one chunk instead. But I dont have that foresight, and I was comfortable with the +5%, +8%, +10%, then +17% (for the last tranche) profit even if it goes up further from hereon.

Another reason that reinforced my decision to sell is the impression that too few (to me) stocks are taking the index up. It was noticeable that a only a few highly-weighted issues are taking our index higher. Unlike the surge last year when almost overwhelming number of issues were hitting 52-week highs left and right (even second liners like ELI and ROCK were being bought up to record highs early last year), the index increase today could just be funds training their guns on less-than-10 specific stocks.

This should bring unsure-ness, but if you have faith in fundamentally-sound stocks that are stil showing strength (like SECB), there might be another +17% around the corner to enjoy.

Pick of the week for Wk38 is GLOPP. Watch also FLI (buy at 1.45 if this reaches this price)

I didnt expect a preferred stock to trade at this high volume. (Look at Ayala's and the preferred stocks of others, which has zero volume daily), but local funds might have decided to park funds according to the dividend promise of this issue. There could be a +5% here in short term. (Disclosure: I bought a chunk of this issue at offering price, when I was looking to park some excess cash in). But--enter cautiously. Im still not sure about the overall market sentiment. There's net foreign selling the past few days, and many are saying that the index increase today is just technical bounce (a temporary respite from being down consecutive days).

Im also observing FLI. It's a definite add when it reaches 1.45. I like fundamentally-sound, good-current-P/E, second liners like FLI, which also pay generous dividend (at least 4%) annually. If you get stuck, at least you can count on some income.

FLI is definitely better than CPG (which is a good peer for comparison) in this sense. Although I also already entered CPG again at 1.28...

Pick of the week for Wk37 is to rest, relax a bit, and watch muna

If you have elected to sell some SECB from the previous week's pick (which should be showing 10-15% today, and the RSI is too red hot todate), the recommendation to do now is watch.

Don't always fight, watch munaaaaa!

Ive sold all my PGOLD at 36.3, when I saw that the foreigners are still intent to bringing it down, and while it was still showing +3.5% in my main port. Today Ive reentered one tranche too early at 33.85. Im prepared to add another tranche at 32.5. It also appears that we are being given opportunity to buy more of TA, another favorite. Im positioned to add again at 2.3. But this is just me. There are no strong positive indications supporting a conviction to get in.

The more rationale move is to watch if the index intends to continue upward to 7400, or we're stunted at 7300. It's right to anchor your entries based on the general market sentiment. The net foreign buying yesterday breached a very favorable  1 B PhP+, this portends great things, but it still pays to be a bit careful given our current expensive valuations.  

If you're itching to enter, enter in tranches. Dont buy in bulk. 

Ukol kay DNL

Isa itong si DNL sa mga hindi ko na nasubaybayan, dahil sa kakulangan ng oras sa pagtutok, na sanhi naman sa pang-araw-araw na pagkakayod (kung di sin sana'y full-time na lang sa pag-te-trade, pero pantasya pa lang yata ito ngayon sa pinas).  

Subalit matagal ko nang kilala ang DNL, Oleofats, Chemrez at FIC, dahil na rin sa arawang hanapbuhay ko.  Naririnig kong ipinagyayabang ng mga minsang kahuntahang manedyer nila na, sa niche ng mga negosyo ng DNL, ay kakaunti pa lamang ang totoong kakumptensya nila. Totoo naman. 

Sa Chemrez halimbawa, na nagpoproseso ng mga virgin (hindi recycled) na resins para sa mga plastik--na gagamitin naman paglaon para sa mga upuan, lalagyan ng pagkain, bumper ng sasakyan, kutsara't tinidor, atbp.--ay yaong subsidiary pa lang din ni Gokongwei (JG Summit Petroleum) ang nag-iisang kakumptensya. Ganoon din si FIC na nagsusupply ng additive para nadudurog ang mga plastic bag ni SM kapag nabilad (oxo-biodegradable), at nang maka-comply ang plastic bag sa mga ordinansang pabor sa nadudurog na plastik (para di magsanhi ng pagbaha). Kakaunti pa lang din ang may teknolohiya (o partner) para may kumalaban kay DNL dito. 

Samantalang sa bisnes naman ng paghahalo ng kung anu-anong recipe at flavors para sa mga restoran, kailangan nyan ng lubos na pag-aaral, kagalingan. at kaalaman para makapasok ang kung sino mang gusto manggaya o mangumpetensya. Kokonti pa lang din ang nasa larangang ito. Minsan ngang nagyabang ang isang manedyer na ipatikim lang sa kanila ang gustong gayahing manok, aba, magagaya raw nila ang marinate, pati ang breading.

Wari koy'y pinapadala rin ng mga Lao ang kanilang mga emplayado para mag-aral o magseminar o mag-benchmark parati sa ibang bansa nang hindi nagtitipid, taliwas sa aasahan sa isang korporasyon ng mga Chinese. Hindi rin sila takot tumanggap ng mga inhinyero at ispesyalistang galing sa akademya. Nandoon na rin ang pagpabor ng mga Lao sa mga Fil-Chi. Sa isang miting, mapapansin mong nag-uusap ang lahat ng Fookien o Mandarin parati ang mga tao dahil halos iisang profile silang lahat. Hindi rin perpekto ang polisiya at diskriminasyong ito, subalit isa siya sigurong pinasimpleng paraan ni Lao para makakuha ng mga empleyadong bata, marami pang enerhiya, at may malasakit sa misyon at vision ng mga negosyo ng DNL. 

Mga mabilis na halos trivia lamang ang mga ito na ginamit ko mismo para mamili nang mamili nang DNL maski noong sumasadsad sya sa sais. Ang prublema lang, naibenta ko na lahat sila bago mag-diyes. Naniwala akong babagsak muna sya ng malalim bago lampasan ang diyes. Biruin mong, makailang linggo lamang, tumitira pa ngayon nang pa-kinse ang DNL. Parang si Curacha na ayaw magpahinga! 

(walang dudang mali at masyadong maaga ang pagkakabenta nang tatlong beses. pero oks na rin ang kita. nabili ko naman sila sa ibaba ng siyete)

Itong DNL dapat ang sinasabi ni katotong turmukesh ang makakatulong kung gusto mong talunin ang ganansya ng indeks. Di gaaanong kahirap talunin ang ganansya ng indeks dapat, kung naniwala at tumodo sa iilang solidong kumpanya tulad ng DNL. Hindi siya ganoon kahirap basahin ang kanyang pramis, maski noong nakaraang taon, kung tutuusin. Halos hambog na nga ang dating ng mga press release ng isang ito. Kung naniwala at tumodong 50% ito ng portfolio mo, daig mo na agad ang indeks ngayon. Yung nga lang, sa aking kaso, nakabenta lang nang maaga.

Ngayon, ang tanong--oks pa ba bumili ng DNL? Oks pa siguro kapag bubulusok pa ang indeks papunta sa 8000. Ibig sabihin, kung naniniwala kang ang sentimyento sa PSE ay sobrang positibo pa para itulok ang indeks sa 8000, bili ka na dapat ng DNL.  

Pero para sa akin, hanap muna siguro ako nang may 5% at makasundot nang kita sa gilid-gilid. Parang ang MBT halimbawa ay dapat madaling sumulong sa 91 ngayon galing sa 86.

Parang trip ko na rin mambasura saglit kung positibo naman talaga ang pangkalahatang sentimyento sa merkado ngayon. 

Yun ay kung may taym mag-monitor. Wag mambazura pag walang taym. 

Pick of the week is still SECB

I cant have a read the bazuras that are riding high today (e.g IS, MRC), and Ive been disciplining myself not to play with them since getting stuck for a long time--although eventually profiting--from SGI and the likes last year. Unless one has inside information on these companies, we can never really be sure. It's just a dangerous bet to enter without any business info at all. Speculators (modern day thieves) still roam the Philippines stock market and they are unafraid. They wont get caught. Our SEC is toothless and policeless as usual in the PSE.

And so Im staying with SECB as the pick of the week. I think this will attempt to breach again (for the nth time) 129- 130. Add the foreign buying support, SECB could pull away convincingly this time. This is still a bet, but at least we have the fundamentals of SECB to fall back to, just in case the bet's timing is still not right and ripe. 

McDonald's, Golden Arches, and Andrew Tan's townships

The local McDonald's franchise reported negative growth at the time our economy is expanding, considering further that our expansion is largely due to consumption. Picture more OFW's remitting money and their families having weekly budget for fast food, but local McD is not getting any benefit in terms of increasing profit out of it.

This regression of McD should also be placed side by side with JFC's report of high growth. Are the local McD stores raising their white flag of surrender to the Happy Bee? Jollibee is taking all the gains without leaving anything for McDo?

Why is this? One reason is probably. Andrew likes to complete his "townships," and a McDonald's store in a cluster of expensive condominiums and office buildings is a valuable chip for Dr. Tan. A chip that he utilizes for the 'bigger picture.'

Megaworld is even using a McDo store as a selling point, and AGI will build it, even if the store is not warranted initially given the small foot traffic (one first requirement for scouting for fast food location is high foot traffic). 

And so these stores may not be earning at all, but it would make the real estate around it more expensive. So, bad for Golden Arches (the company that holds the franchise for McD globally), but still good overall for AGI. 

But for long-term, AGI must still plan for Golden Arches to grow as well. I wonder though how AGI would resolve to show promise for Golden Arches as a subsidiary. Its marketing is still robust, commercials creative, and it is still differentiating itself from Jollibee as 'more premium' fast food alternative. Would this be effective in the end? 

About AGI, at this time

Weeks ago, I've listed AGI as among the issues I eagerly await to be given a chance to go back to. Among other reasons, I believe in AGI because

--this is the best-diversified conglomerate among its peers. 

--foreign funds has consistently show support for it.  

--Andrew Tan also is still hungry. He will continue to take risks and put money on opportunities that he sees.

--Ive never lost a trade with it (so far). This was one constant source of 'consolation prizes' many times over last year even during the hard downturn. 

But it's a foreign transaction that apparently now brought down AGI. Fidelity Fund, a big mutual fund in the US, apparently made a side deal with Andrew and bought a block at a big discount. At what discount? Appears they are not required to disclose.

In any case, this brought the wrath of other foreign investors. They sold down hard and perhaps attempted to bring down AGI to the perceived price that Fidelity bought it at.

And then there was also the lackluster earnings report for the most recent quarter.

The combination of the two negative 'catalysts' brought down price quickly by minus 20%, while peers such as AC continued to increase. Now, technical analysts will tell us that the downtrend is sure and continuing (see two parallel lines going down). It's not safe to get in yet.

Now, what to do?

Given that we dont know the buying price of Fidelity, and this is already a done deal, the first question is: has the market priced-in this factor by this time?

And then second question, can AGI recover to its winning ways in earnings on short and medium term? One subsidiary that reported negative is McDonald's. Can McD become a contributor soon? (More on McD as a member of AGI in another post)?

The forward P/E of AGI is now 14 and showing -7% one-year return. Compare this to AC  which have 25 P/E and +30% gain. If you consider just these data, it's time to start betting.

But if you are guided by TA,  you have to wait for around 25.3 to be breached convincingly (with good volume) before you get in.

For me, I entered AGI in my nimbler port at 24 and promptly sold all at 25 in 2 days when I saw that it is having difficulty breaching 25.

Then in my main port, I have been averaging down since this issue went below 25.3. Now my average price for 3 tranches is showing -4%. Im putting aside Technical Analysis mean time and just placed my next buy at 23.9. I wont be afraid even if AGI becomes 50% of my total port. I think all the four reasons that are mentioned in the beginning of this post are still true. It still sounds good to believe in the fundamentals of AGI.