Pick of the week for Week 45 : TA TEL, and look out for buy-again points in GTCAP, SCC, MEG, AGI, JGS, and AEV

TA has good momentum currently and the sell volume is getting thinner and thinner since late last week after it surged up. Im heavy on TA; I was able to get back to my previous big position after I sold near half of holdings at its 2.8 peak months ago. Even though TA was not in my pick of the week list, I just bought tranches gradually when it was hovering at 2.1 - 2.2. This was done on faith given TA's growth potential, the management of the company, and its clear plans. Any one can read up on the plants and windmills under development, as well as Dean Viray's existing clout in the industry (including regulators). Lastly, Ive never lost yet a trade in TA and it gave me consistent hefty profits since to start of the year, so to support the stock's price at 2.1 can be sheer returning debt of gratitude (utang na loob) on my part :-) Further, Im still expecting gains on the property divs for Trans-asia Petroleum.

I was not expecting TEL to go back to below 2900, more so to go back insider its previous strong support at 2800-2830 range. This is always a safe stock to accumulate given its dividend yield. Furthermore, its current P/E is 15.8 while GLO is already at 21. I think the market is mis-pricing TEL and we should take advantage of the opportunity handed to us. Im ready to just add and add tranches even if TEL goes down to 2500. After adding earlier today, I now hold 5 tranches of TEL in my two ports (two brokers) combined.

Both TA and TEL I believe should gain +10% within this month, but I'll be starting to sell at +8% vs. their current price, considering that we are still not in a confirmed overall uptrend.

One should also keep an eye on stocks that may offer good reentry points within the week. MEG I think is a buy-again/add at 3.69, AGI at 25.30, JGS at 41.50, and AEV at 49. I have already set GTM buys myself at these levels. Part of the wishlist is also for solid favorites (but not holding currently) GTCAP to go back to 803 and SCC to 240ish before we enter 2014, but these could be far fetched.

Thank you, MEG and JGS!

Writing a short post just to gloat about these two picks that were on point and jumped within the 30-day period that Ive set.

Ive sold some MEG at 3.65 as previously decided, and some JGS at 42. Im still holding a substantial half of each though, given that they are still showing strength. Ive set next sell points for MEG at 3.79 and 3.89; while none yet for the remaining JGS, since this conglomerate is releasing good news left and right and peso appears strengthening (they will declare forex gains if peso comes back to 40 PhP).

There was also some hefty gain from ANS, which I sold at 6.89, 6.99 and 7.1. I wish I could have added more when it was hovering at 6.5, and many of us in SMP was almost 100% sure that it is going to announce a hefty devs, but it was the low volume trading that held me off. In any case, it was a good ~ 8% average gain.  Thank you, too, Andres. (Lorna Kapunan, abandon Napoles please).

Only FDC and LC appear to be failed (minor and speculative) picks. Im still holding two tranches of LC at -6% loss (Im ready to cut loss here at -15%, but it never reached that yet). I added one tranche of FDC at 4 (buy was set last night). I believe it should go up given that subsidiary FLI is going up.

Week 41 was a good week, while Im mostly out and cant follow the action.

Still have no time to research for a good pick. Will do that again on Sunday.

Recounting Week 39

If I was asked to place a bet last Sunday on whether the market will go up or down throughout last week, I would have bet that the market will go up even by 1%. What happened instead was we went back to a low 4-6 B PhP trading per day, and locals took profit. We're down 2% as a result.

There were also some negative rumours about AGI that made locals sell. That news about its shortchanging of upcoming backdoors and IPO's could be true, but Im ready to average down even if it goes down to 19.

The news about SMC, JGS, and MER also made impact. I made a separate post on this topic.

The main news that brought down equities seems to be the stand-off between US Congress and Obama on budget. Obama should show the lower house that he has some balls to shut down the government if needed. I think Speaker Boehner and his cohorts have smaller balls, and will give in the next two weeks, prompting a rally just before FED tapering news permeates again by end-October.

I profited +3% twice on JGS in the week, and sold half of green MEG just to hedge. I will add in MEG though if it goes down to 3.34 again. Im sticking to MEG as a good pick, with a time frame of two weeks. Im also still holding a significant MBT at 6+% gain
Im retaining cash position at 30%

I also made one tranche entry in SECB, which immediately turned green on the same day. I think its preferred shared rights is good for the stock price in the end. And SECB also tumbled dwon so low from its June high, it has so much room for an intermediate uptrend.

I was also watching VLL, because of its low P/E (good for value investors), new vigorous involvement of basura swimmer (good for 'N' in CANSLIM as explained by James), and solid sales growth. But it seem unable to get past the 5.5 hurdle. And more importantly the sell-side volume is always higher than ask. Im eager to get back to this issue at 5.05, but will probably start with one tranche on 5.15.

And then I also caught up on the last two episodes of Breaking Bad. Ive been a heavy user of IMDB since college (more than a decade ago), and this is the first time ever I've seen a 10/10 score in any film or tv episode. And it's fully deserving this perfect-ness. I cant help but blurt out an audible "wow" after I finished watching it myself, alone, in front of a desktop computer.

Others who are not following Breaking Bad might not be able to relate and be "hit" with the fullest impact of the episode. If you are not yet a Heisenberg follower, start now, even with just the 4th season. It's good to invest time in probably the best series ever in TV history (beating even Sopranos and The Wire).

JGS, SMC, and MER

Whichever way you look at it, this news does not bode well on the short-term price of MER

I would say that MER will be saddled inside 250 - 260 range in short-term. Why?

• Gokongwei will not buy at current market price without any discount. 10% off is a reasonable expectation for JGS or the deal is off. Now, who's more desperate, the buyer or the seller? 
• RSA seems desperate to divest, so SMC will have some money to pay off short-term debts. (Important to read this). I can picture SMC's Finance trying to find ways to make a better picture off its current balance sheet. 
• JGS's own interest probably lies only with Gokongwei's current thrust to keep holdings that pay-off consistent dividends. He will not hope to get control of MER today or on long-term. MVP's hold in Meralco is cemented at this point.He wont hope to get immediate synergy from adding MER inside JGS. 
• So, it's SMC who's more interested to sell at this point. 

I unloaded all my MER shares at an average 8% loss.

Unless a player will jack-up the price of MER back to 300 PhP level before applying say a 10% discount to JGS's buying, this whole deal is not good for MER. But who has the incentive to do jack-up price? 

In any case, any MER price down will only be temporary. The merits of MER as a company--which has solid revenue growth and even planning to establish power plants of its own--will prevail in the long run. 

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. 

Pick of the Week for Week 34: wait for JGS and MPI to kiss their support levels; small moves in MBT

The main reason for JGS's downtrend is its reported reduction in earnings. The non-growth in terms of income, in turn, was caused by forex losses. Perhaps the Gokongweis gambled. They thought that because of the Philippines's upcoming upgrade to non-junk and all, PhP will reach 38:1 to a dollar easily (as what most of the pundits also confirmed just three months ago), so they tried their hand to earn a bit extra from the peso's projected appreciation and made loans or sold bonds in USD.

Now, because the dollar suddenly strengthened, forex loss hit JGS hard. This is the same case as AP, SMC and power companies. But unlike SMC (whose sales figures are stagnant or decreasing) , JGS's revenue are increasing comfortably (they would have reported growth in earnings if most of their loans are dealt with local banks). And the conglomerate's businesses are all solid and poised to grow.

Therefore, we should observe JGS's movement in the next 14 days. If the price kissed 38, I'll buy with initial tranche, and will average down until 35.


MPI on the other hand seems to be forming one of two channels:

The first, which I favour to happen, is a rectangular one:

Rectangular channel. Note that we disregarded the huge dip in July, which can be considered an outlier (foreigners selling-down indiscriminately during that time). 

If this channel holds true, MPI is a buy with one tranche if it reaches 5... and should be for average down at 4.9, 4.8, 4.7. There must be some real bad news in our economy or with MPI if reaches 4.4 or lower. If it slides down that low, we'll have to do that painful cut loss. 

A familiar triangle formation is also a possibility. If you pick this option, buying should start at between 5 - 5.1. And cut loss all position immediately if it drops below 4.8 (support if you look at candlestick). 

Lastly, I have high conviction that MBT is a buy at current price... and for average down until 100 PhP (which should serve as a very strong support)... until Aug 28, at which time you can opt to sell all, or a portion of your position, at a [should-be] gain. Hopefully that gain would be more than +10% (which is heaven at current market condition), or realistically at +5%. If you get the hard part of the range--say your average price turned out at 108, but price tumbled down to 101 at closing of Aug 28--you can opt to just hold for the hefty stock divs (ex-date 29 Aug) and find a rally to sell in September. Either way, I believe you wont lose trading MBT (with fresh buys) in the next 10 days. 

Let's go!

Clap! Clap! Clap! CPG

Maraming salamat CPG, maraming salamat Robbie da Pogi, maraming salamat Paris Hilton at sa iyong dedeng masyadong pinisa para magka-cleavage.

Tama na sa akon ang diyes porsyentong kita na naani pagkatapos lamang ng tatlong araw. Bakit hindi ko hinintay ma-abot ang rurok ng luwalhati bago ibenta? Hindi ko naman kasi masusubaybayan ang merkado; kailangang kumayod sa umaga. Hindi rin pangmatagalang hawak para sa kin sila Robbie; hindi ko arok ang kanyang Museo at di ko alam kung bakit pinapayagan at iniispoiled sya ng kanyang tatay sa mga kaululang pagkakagastusan.  Hindi rin tayo nag-aambisyon na makaganansya nang katulad ng kay SUN. Hindi rin ako fan ng pilit na cleavage. Atsaka, hindi rin ako kumbinsido pa na nasa "confirmed uptrend" na ang merkado, ika nga nila William O'Neill (bagamat isa ako syemps sa nananalangin na sana simula na nga ng pagsipa pataas ng indeks).

Ngayon, nag-post ako ng buy sa AC at BEL. Sana mabiyayayaan. Sisilip din ako sa galaw ni AP at JGS bukas nang alas-diyes. Hindi gano pabongga at napapansin ang dalwang ito, pero mga solido naman na kumpanya. Ang AP, di pa gano tumaas, malamang may sipa maski +5% hanggang biyernes.

Ang JGS, natalo lang sa forex kaya mababa ang ganansyang inulat. Pero kung wala ang pagtaas ng dolyares laban sa piso, buung-buo ang kita ng mga negosyo ng conglomerate na ito. Maganda pa ang kumbinasyon ng bisnes ng mga Gokongwei. May sinerhiya ang real estate, retail, food manufacturing, plastics processing, etc. Hindi katulad ng kay RSA na kalat-kalat, buhaghag. walang core, at tirada lang nang tirada hanggang sa malugi (Wi-tribe). Di pa mahuhusay ang mga middle managers ng SMC. Magagaling lang mag-follow-up at puros sigaw (pero walang diskarte).

Gudlak sa atin!