Gus Cosio says so

Ideas on the Philippine Stock Market

What’s the L.A. Lakers gotta do with the market?

9:55 am  Monday  21 June 2010   Philippine Stock Exchange Index  3355.04

The S&P 500 index closed a touch lower on profit taking on Friday while the  DJIA edged higher.  The mixed close looks constructive to me because it hints of consolidation of the broader market while evidence of strength is building among the headline stocks.  Technical analysts think that stage is set for a steady to higher opening this week in the U.S. markets.  It appears to me that in the absence of discouraging news from the developed markets, things can start looking good locally.

It would not surprise me if people are in a buying mood at the start of the week.  MEG and AGI, for instance, are showing good trading opportunities.  I think MEG has gained some momentum and the anxieties surrounding the rights issue has been overcome.  What I think could break out this week is AGI whose price action looks like it has reason to move a level higher in the next couple of days.

A stock that may be worth the punt today is BPC.  I think with the major management moves going on in the company, there should be some new ideas being injected into the company.  Also, given that the Lopez family had lost control of Meralco, it would not be surprising if they try to consolidate resources in BPC which is actually the parent company of FPH.

One should also watch DMC this week because it is so close to its breakout point and with the rights offering of SCC being well subscribed, DMC may just take-off to the next level this week.  DGTL is also one idea that may be worth taking despite the sluggishness of the telco sector simply because it is the only one of the three major telcos that is showing growth through increase in market share.  Of course, enthusiasm remains with its parent JGS.  Having said that, perhaps GLO should be sold and TEL could be avoided.  Nevertheless, we should watch out for the next dividend declaration announcements because TEL has around 8% yield at these levels.

Among the power stocks, I was having a discussion with a broker friend of mine and he was accumulating EDC for the simple reason that it provides the main growth driver for FGEN and FPH.  EDC from a technical standpoint looks pretty much oversold at recent prices.

All told, I think the market is looking rather positive.  I feel constructive with the stocks I follow.  Some investors will likely go for the banking sector as a proxy for the economy which I think is on a firm upbeat.  This week will probably prove profitable for those who play from the long side.

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June 21, 2010 - Posted by | Financial markets in Asia

17 Comments »

  1. Ey Gus,

    What you think is a good entry and exist for DMC and JGS? Isn’t DMC a bit high at 18? I’ve been eyeing these stocks lately. A friend of mine also recommend BPC and now you mentioned it, I’ll definitely research about it. Overall, I’m looking for a dip for buying opportunities =) Thanks!

    Comment by Raymund | June 21, 2010 | Reply

    • Raymund,
      DMC closed today at 17.50. I have no problem buying it again at this price level. Have a look at EDC as well. These days, you should not be underweighted in the pwer sector.

      Comment by Gus Cosio | June 21, 2010 | Reply

  2. Sir Gus,

    Would it be a good idea to sell MBT and pick EDC right now?
    And what could be lagging MPI at 2.8? TIA 🙂

    Comment by JohnTheMan | June 21, 2010 | Reply

  3. Sir Gus,

    I posted this in your June 16 blog only to find out that there was already a subsequent blog so you must not have seen it. I appreciate if you can still reply to it.

    What do you think of FGEN? I began acquiring this at 11.50 then averaged down. My average price now is 11.23, with a 10% paper loss or rougly P38K. I see that it has good fundamentals with its 2010 Q1 EPS at 89% of its whole 2009 EPS. Also, its NFS is going down, and yesterday it was only 1.5 million. Its book value is P14/ share. This is about 17% of my portfolio. My other stocks are EDC, MAB, MPI, JGS, BPC, LOTO, DGTL, MEG and PNB.

    Thank you. I have been guided much by your write ups and your answers to the many questions posed to you. More power.

    Comment by Nel | June 21, 2010 | Reply

    • Nel,
      you have an enviable portfolio. I do not think you will lose money on FGEN. In my view, FGEN should climb to 15 in the next few weeks.

      Comment by Gus Cosio | June 21, 2010 | Reply

  4. Sir Gus,

    Would it be a good idea to sell MBT and pick up EDC right now?
    And what’s lagging MPI at 2.8? TIA 🙂

    Comment by JohnTheMan | June 21, 2010 | Reply

    • John,
      the date on this comment is 2010/6/21 so this may be a late reply but at this time (2010/6/29), selling MBT at 63 and buying EDC at 4.50 may not be such a bad idea. I actually like it.

      Comment by Gus Cosio | June 28, 2010 | Reply

  5. Bought (all-in)GLOBe @ 850 today…i think it will go up until next month(july)…Im holding MWC,EDC,Vll,Rfm and Meg right now… 100% stocks ….

    Comment by nadia | June 21, 2010 | Reply

    • Hello Nadia,

      Please share to us some info on why Glo will be going up next few weeks?

      Thanks

      Comment by alex | June 21, 2010 | Reply

      • Oversold since april, few weaks hand left, strongly supported @ 850, volume more than 100k for the past 2 days.

        Comment by nadia | June 21, 2010

      • I would avoid GLO for 4 main reasons.
        1. Telecom market is saturated, even kids have cellphones these days. So i think it has a little room to grow.
        2. It’s losing market share(you would’nt want to own a company with losing market share).
        3. Operational/marketing cost is increasing while income is decreasing, If you read forums, most custormers feed back to GLO’s plan is expensive.
        4. My broker’s Fundamental Value estimate is P800. 🙂

        Comment by JohnTheMan | June 21, 2010

      • Thank you Nadia for sharing your thoughts. Im not well versed in technical and I usually buy based on fundamentals. That is that, company with growing profits will have growth in share price assuming it is reasonably valued at the present.

        Best regards

        Comment by alex | June 21, 2010

  6. Hi Sir,
    I’ve been sitting on MPI for quite sometime (18% of my portfolio consisting of 68% power-EDC/FGEN/MER and 14% PNB). Its has been the only laggard among my portfolio and somehow has create a dent on paper profit. Should I sell it at a loss. Where do you think I should divert? more on bank or at least 1 property stock? I think I should be fine with my power stocks for now though I bought FGEN at 11.50.

    Regards..mark

    Comment by mark anthony | June 21, 2010 | Reply

    • Mark,
      I would advise patience. You’re portfolio is not so bad. MPI, in my view will trade in a range between 2.65 and 3.25. It is in the middle of that range now, so just be patient.

      Comment by Gus Cosio | June 22, 2010 | Reply

  7. ITS Time to buy GlObe…..selling my VLL tommorow to Buy GLO…

    Comment by tommy | June 21, 2010 | Reply

  8. Sir Gus,

    Would it be a good move to sell MBT and pick up EDC at these levels?

    What could be lagging MPI at 2.8? TIA Master Gus!

    Comment by JohnTheMan | June 21, 2010 | Reply

  9. sir gus,
    i do believe i got my dream team stock position…hehe
    at center – PNB (howard), power forward- EDC (pierce), at small forward- MPI (lebron), at shooting guard – DMC (kobe), and point guard – BPC(nash)….
    and of course, sir gus as coach phil….gogogo!!!
    if i need substitution, let me know sir… i got reserved like MBT (durant), DGTL (gasol)…hehe

    Comment by draco23 | June 22, 2010 | Reply


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