Gus Cosio says so

Ideas on the Philippine Stock Market

Fasten your seat-belts

8:45 am  Tuesday  26 October 2010

I am sure that at some time or another, people have seen a TV coverage of the run of the bulls in Pamplona, Spain.  In many of those runs, you see people getting hurt when they try to cross the path of the running bulls.  I guess when you see a herd of stampeding bulls, it is never wise to stand in the way.

I am one of those who has been waiting for a correction in stock like AP and DMC.  I was even waiting for TEL to drop to 2600.  Unfortunately, I have been wrong.  I should have bought DMC again when it fell below 33 on Thursday or  even EDC when it dipped below 6 for a brief moment.  At this point, I am also entertaining in my thoughts some of the boring stocks like BPI, AC and MWC simply because the tide is raising the level of all boats in the harbor.

Like I said, in a bull run, if you just stand by, you get to be left behind.  That was really why I thought that even if many locals were skeptical about the CEB IPO, it should be bought.  Today, we see its debut.  It will either soar to the air with the greatness of ease or it will just stay put.  There is no way this IPO could run to the ground, not while the bulls are out there raging.  I am not in the habit of guessing where the price should be but a 10 peso move will not surprise me.  We should be in for some excitement today.

Do we just sit and watch the show?  Well, for those who missed it, I think there are a couple more IPOs coming.  The next one is Nickel Asia, and even now, I’m thinking that this nickel mining company will be oversubscribed by both local and foreign investors.  It is the oldest nickel mining company with a long record of profitable operations of the company’s other claims.  I suggest that people start queuing up with their brokers while it is still early.

I also learned that today, Credit Suisse starts operations of its seat in the PSE.  Another avenue for foreign money to enter this market.  I hope they come in with a bang not a whimper.  With bigger players setting shop, I can only surmise that as CEB takes off today, the rest of the market could be well sustained in its tailwinds.

Have a good week!

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October 26, 2010 - Posted by | Financial markets in Asia

23 Comments »

  1. Ceb may double your money in 3 months time…Lance is very lucky everyone is bullish right now:))

    Comment by Sputnik | October 26, 2010 | Reply

    • Keep your fingers crossed, sputnik. I really hope you’re right.

      Comment by Gus Cosio | October 26, 2010 | Reply

  2. Hi sir,

    Would you think it is a good idea to sell ORE in favor of Nickel Asia? I was thinking of adding to Nickel while im holding ORE but im just worried of having 2 mining stocks in my portfolio…

    Thanks

    Comment by Nico | October 26, 2010 | Reply

    • Nico,
      My strategy is to keep ORE since it is a cheap stock that is just starting to attract attention. I’ll get as much Nickel Asia with whatever cash I have left.

      Comment by Gus Cosio | October 26, 2010 | Reply

  3. When can PX fly? seems everyone is after for Nickel Asia – does anyone know how much is the IPO price for Nickel Asia? do they have the symbol for PSE?

    Comment by JOEY DELEON | October 26, 2010 | Reply

    • Pahabol – Is it a buy for ORE pa din ba? and whats the Target price to sell for ORE?

      Also ano kaya mas malaking kita for mining – Nickel aisa, ore , PX or PO?

      Thanks!

      Comment by JOEY DELEON | October 26, 2010 | Reply

      • Short term: ORE – I will re-allocate some mining/metals fund here in the short term. Reason: very cheap stocks, once Nickel Asia comes into the picture, nickel mining companies will have a market benchmark, and with ORE’s current publicity….the target PE ration of 6X by sir Gus is achievable.

        Long term: It will be Nickel Asia (as it is the holding company for x-numbers of mining companies controlled by Zamora’s.)

        Comment by Raymond | October 26, 2010

    • Symbol: NIKL
      Target price: 14.95 – 23.00

      Comment by Raymond | October 26, 2010 | Reply

  4. I almost bought PX when I saw it at 13.25. I think I need to get into the mining action seeing as how china’s been putting the squeeze on the market. It’s just that, PX’s pe is too high for me. I think there’s a greater tendency for PX to go down instead of going up. Lets not forget it was just 9p two months ago. A 50% increase for any stock is pretty good. Much more so when we consider that PX’s earnings are good, but its not +50% good..

    My fantasy price – PX at 13p.

    If the nickel asia goes on sale with a pe in the range of 12-15, I’ll be snapping that up I think..

    The good news (for me at least) is I’ve completed my RCBC stake for now :happy:

    Comment by jasper | October 26, 2010 | Reply

    • Jasper,
      I consider PX to be a traditional way to invest in the resource sector since it has such a well developed business and is a well known mining play. It will always be the first stock to benefit from a large shift to resource stocks and mining. By the way, the materials sector is in favor among global portfolios, so metals players will be keeping an eye on minerals and mining.

      Comment by Gus Cosio | October 26, 2010 | Reply

  5. Hi Sir Gus, do you think it’s a good time to sell AGI now at 11 then wait for it to consolidate near around 10++? I average around 8, and am thinking if its a good move to protect some of my profit now at current levels.

    by the way, thank you for your advice on ORE and CEB. I shifted some of my PX to ORE and earned back most of my losses (Im so good I bought PX at a high of 16. haha)

    Thanks!

    Comment by Cholo | October 26, 2010 | Reply

    • Good work, Cholo. I think CEB will start to gain a local following. Right now, most of the buyers are foreign investors. I learned that foreign orders were only allocated 40 to 60% of their desired amount. You have pent up demand amounting to around Php 12 billion more or less. Given that the underlying tone for the market is positive, I think CEB will fly some more.
      On AGI, there should be no rush to sell. I hear that they may raise more capital for expansion. It looks like their Resort World across NAIA 3 is going great guns.

      Comment by Gus Cosio | October 26, 2010 | Reply

  6. CEB opened@ 132 went as high as 133.5 and closed @ 133, wondering what will happen tommorow

    Comment by Jofoler | October 26, 2010 | Reply

    • Jofoler,
      You’re guess is as good as mine. I am assuming that some of the under allocated fund managers got some shares from the market today. I estimate that another Php 8 billion of demand is in the market given the buy volume that we saw today.

      Comment by Gus Cosio | October 26, 2010 | Reply

  7. Sir Gus congrats on your CEB it goes UP with good volume…250/sh by Dec?

    Comment by Apollo 11 | October 26, 2010 | Reply

  8. Hi Gus, A quick just a question.

    Do you have any info regarding VLL? To be more specific, I see that gross earnings is about 6B for the first half. Yet, they’ve been declaring they will reach a record breaking 20B sales this year. That’s quite a lot to cover in six months.

    Is that achievable? The only way I can think why they can earn this is if they are withholding entering sales until the last half of the year.

    Comment by jasper | October 26, 2010 | Reply

  9. Is it wise to go all in on Nicke Asia?

    Comment by Cathy | October 26, 2010 | Reply

    • Cathy,
      It is never wise to go all in on one stock. Buy Nickel Asia, but make allowance if things go wrong.

      Comment by Gus Cosio | October 26, 2010 | Reply

  10. Heya Gus,

    how are ya? I know you had a great day today with CEB up 6% 😀 I was too, I managed to buy some more at 129 today. Saw that 4 pesos above the IPO subscription is way to good to pass.
    Oh, I’d like to get your opinion, which is better to place bets? AT or ORE? would entry points at AT (under 20) and ORE at 3.55-3.65 be ok? I can’t have both though…I only hold 3-4 stocks at any given time. I plan to sell my JGS and grab either ORE or AT. what are the Target Prices for AT and ORE?

    I saw you on ANC last week with Maike Oreta, you’re looking good. hehe as good as Gordon Gekko! Thanks for the tips!

    Comment by Gordon Gekko | October 26, 2010 | Reply

    • Yo Gordon,
      I saw a presentation on AT and 20 to 22 seem to be a fair level for the stock given copper and gold prices where they are today. On ORE, one analyst puts next year’s EPS at 99 centavos which pus it at around 3.61 X 2011 PE. My money is on ORE which my senses tell me will go above 4 just before the the Nickel Asia IPO. Then people will start re-allocating to Nickel Asia.
      Thanks for the compliment.

      Comment by Gus Cosio | October 26, 2010 | Reply

  11. Sir,
    Finally new broke confirming ORE’s 1st shipment in December. What’s ur take on this and stock price since awaited news has been announced. Good thing bought mine at 3.03.

    Comment by Mark Anthony | October 26, 2010 | Reply

    • Mark,
      I believe that it is good to ride your winnings. Have a great ride with ORE.

      Comment by Gus Cosio | October 26, 2010 | Reply

    • MA,

      Is this speculation by the recent field trip via word of mouth, or is this actually put out by ORE as investor information in a news update? I mean, is this shipment firm and can anyone point me to the news brief regarding this shipment please?

      Thanks and more power!

      Comment by Juanito | October 26, 2010 | Reply


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