Gus Cosio says so

Ideas on the Philippine Stock Market

Off but not yet running

9:15  Wednesday  5 January 2011

If one would look at the performance of the neighboring markets Tuesday, i.e. China, Hong Kong, Indonesia, Thailand, etc., he or she would feel very disappointed.  These markets are rising above the clouds with two-day gains already at around 3% while our market looks to be struggling to reach even a half percent gaining these 2 days of 2011.  With Wall Street up strongly overnight Monday, I thought the sentiment would carry over locally.  Sadly, people are selling into whatever strength is showing which is likely a continuation of profit taking that started near the end of 2010.  There only a few stocks that seem to be pushed beyond their recent ceilings, notably MER and MPI, although MPI has done a bit of retracement.

Personally, I am happy that the January effect is not yet strongly upon us.  Nevertheless, I am keeping my powder dry and getting ready to make the plunge soon.  Actually, earlier today, I was looking to average down on my JGS position since it is way below my portfolio cost.  I like the stock’s fundamentals.  You can see a concise financial analysis on http://www.reuters.com/finance/stocks/financialHighlights?symbol=JGS.PS.  I am not so concerned whether or not the Gokongweis  are trying to screw its investors.  I am willing to take a chance that they are doing their best to build a great company.  The reason I held off buying was I think the timing was not good and I will patiently wait another day.  After all, if the stock goes up, I already have a position.  If it goes down, then I can buy it cheaper because I am buying it for around a 30% gain from when I come in this time around.

I also postponed buying EDC because it has gone up and I am not yet compelled to chase it.  I would be happy to pick it up at 5.80.  There are a few stocks which I wish to line up but I think I will not chase prices; rather, I will wait to buy at price levels where I am comfortable.  The stocks which i will choose to follow are the same although, as some people suggest, it may be time to follow some of the SMC/RSA counters.

In the meantime, the monthly inflation figure for December 2010 of 3% and the whole year 2010 figure of 3.8% supports the strong fundamentals underlying the Philippine equities market.  I view this as solidly positive for the market.  Those with longer time horizons should be working on their buy list already though at a cautious and deliberate pace.  Otherwise, I think we should be doing better even if we buy today and sleep on positions for at least a month.  The direction is still in favor of going long.

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January 5, 2011 - Posted by | Financial markets in Asia

40 Comments »

  1. Am not saddened by some profit taking though I haven’t unloaded yet on my dark horse MER and DMC. Like you, I am very positive that the bull is staying with us for quite sometime. Very comfortable with the positions I had since August till Dec. yay! 🙂

    Comment by Shan | January 5, 2011 | Reply

  2. People are spooked about something with JGS. Wish I knew what. When it when down to 18.5 I was really tempted to buy some more. After all, who wouldn’t want to buy a strong conglomerate at about 8x PE

    But I’m holding on to cash right now. I think I’ll wait until the secondary offering is clarified. Who knows, maybe it will go to down 15. 🙂

    Comment by jasper | January 5, 2011 | Reply

    • Meron daw malaking ahas sa basement 😀

      Comment by Cris | January 5, 2011 | Reply

      • Yun daw ang panganay na anak ni Mr John Gokonwei. Pagkatapos, nakita daw ito ni Alice Dixon.

        Was that in TV Patrol some decades back.. :/

        Comment by jasper | January 5, 2011

      • kakambal daw yun ni Robina. Pero yun daw ang masuwerte basta pakakainin lang palagi ng…..tao!

        Comment by nikmatik | January 7, 2011

    • that is the time i will enter again jgs. its just a matter of weeks and we will know what is the price. unlike mpi before it raises capital to pay its existing debts while jgs has a lot of cash for capital venture. it makes the big difference.

      Comment by richard | January 5, 2011 | Reply

  3. ano kaya magandang stocks ngayon? got spare moolah. Does anyone know about PNB and MBT kung tataas pa?

    Comment by JOEY DELEON | January 5, 2011 | Reply

    • Joey,
      I was very bullish on PNB last year. I think the stock has run its course. MBT has greater promise.

      Comment by Gus Cosio | January 5, 2011 | Reply

  4. Jim Cramer is recommending to BUY Gold and Gold stocks..in May-june 2008 3 months before Lehman collapse his telling everybody to buy banking stocks..LOL

    Comment by nikki | January 5, 2011 | Reply

  5. I earned alot from PNB last year but I entered again. Gus, do you know what’s the best price to enter MBT? thanks!

    I’m thankful for this blog. More Power!

    Comment by JOEY DELEON | January 5, 2011 | Reply

  6. Sir Gus, What are your thoughts on CEB at current prices? It’s starting to look attractive 🙂 Thanks sir!

    Comment by KennyV | January 5, 2011 | Reply

    • Kenny,
      I like CEB. I think it is cheap at these levels, but the market has not yet decided to pick it up. Perhaps, it is the skepticism due to the entry of AirAsia. I think that both airlines can compliment each other, but that has yet to be seen. As for me, I am willing to stick to my CEB positions for the time being.

      Comment by Gus Cosio | January 5, 2011 | Reply

      • I see, thanks a lot Sir.

        Comment by KennyV | January 5, 2011

      • JGS is buying aggressively at 101 to 109 level. It now has 130,000 CEB acquired shares which cost 130 Million. This is a sign that management believes the stock is cheap. I am also holding my positions I bought at 101.5.

        Thanks Sir Gus!!!

        Comment by alexis | January 5, 2011

  7. Sir Gus, I’m planning to allocate a small portion of my cash for Chemrez (COAT). Its current PE ratio is 6.8 but the volume traded only for today is 61,000 shares (P149,710.00) which is quite small. Could you give your thoughts on this one? TIA sir —-> avid follower

    Comment by RmR | January 5, 2011 | Reply

  8. Good Day Sir Gus, do you have any suggestions where one can find company financial info dating back further than 5 years? The oldest I can find from reuters is from 2005. Thanks

    Comment by Cogitator | January 5, 2011 | Reply

    • You’ll have to go to the SEC and it will cost around 500 pesos per year.

      Comment by Gus Cosio | January 5, 2011 | Reply

      • Got it, thanks Sir.

        Comment by Cogitator | January 5, 2011

  9. Sir Gus, good day po! What is your take on FPH? it is ok to hold it for long term ? it is possible that FPH price reach 100 year end ?

    thank
    ron

    Comment by ron | January 5, 2011 | Reply

  10. Hi Sir Gus,

    What does RSA stocks means? 🙂

    Thanks!

    Comment by Forth | January 5, 2011 | Reply

    • ramon s ang, i suppose

      Comment by ricky | January 6, 2011 | Reply

  11. RSA means Ramon S. Ang stocks like SMC, SMB

    Comment by al | January 5, 2011 | Reply

    • Looking at market today, I was also surprise on the value of SMP.

      Comment by gunner | January 5, 2011 | Reply

    • Is it true that Pacifica (PA) is RSA-related? I used up my extra cash to join the huge PA punt earlier today, if it is, I’ll probably add a bit during the retracement.

      Comment by GolfPunter | January 5, 2011 | Reply

    • oh ok. Thank Al! 🙂

      Comment by Forth | January 5, 2011 | Reply

  12. Sir Gus,

    I am planning to allocate some funds on RCB & SMDC, would it be a good buy at this time? Thanks.

    Comment by gunner | January 5, 2011 | Reply

  13. hi sir Gus good pm po,What do you think sa APM? kc mrn ako stocks now sa APM at ang bili ko ay 0.0150, currrent price po nya now ay 0.0140, tataas paba kaya to ng 0.0160?

    Thak you!

    Comment by mike | January 5, 2011 | Reply

  14. Sir Gus, what is your suggestion to buy price OV, OPM/ OPMB,?

    Thak you,

    Comment by mike | January 5, 2011 | Reply

  15. sir gus, how about the MWC stock, i am a long term holder of this stock. Is this a good time to accumulate some more on this stock.

    TIA sir.

    Comment by fripo | January 5, 2011 | Reply

  16. sir, any news on ore and fgen… I have bought ore when it went down to 4.10 but still went down. I have been holding fgen since start of 2010 and have not yet gone up…

    Comment by Bu$h | January 6, 2011 | Reply

    • Bush,
      I am sure FGEN will rebound but only after EDC goes up some more. As for ORE, I think that you’ll be able to trade out of it above 4.10 but it will take a few more months.

      Comment by Gus Cosio | January 6, 2011 | Reply

  17. which is better edc or fgen?

    Comment by Bu$h | January 6, 2011 | Reply

    • I prfer EDC over FGEN because EDC drives 60% of FGEN’s earnings.

      Comment by Gus Cosio | January 6, 2011 | Reply

  18. Hi Sir,

    I have read that MER would be slashing their rates. Would you recommend waiting first a couple of weeks for a good entry point?

    Thanks

    Comment by Mel | January 6, 2011 | Reply

    • Mel,
      I think 230 would be a good entry price even with the rate cut. Remember, they can cut or raise depending on cost. Margins remain the same.

      Comment by Gus Cosio | January 6, 2011 | Reply

  19. dillema what to buy. fli or vll? thanks sir.

    Comment by irving | January 6, 2011 | Reply

  20. hi sir..just wondering if DMC has still energy to kick?thanks!

    Comment by irving | January 6, 2011 | Reply

  21. HI Sir Gus,

    What do you think of URC? makabalik pa kaya ito ng above 45? thanks..

    Comment by ronaldo | January 6, 2011 | Reply

  22. I bought some VLL today at 3.19. Average down since I previously bought some at 3.88. ngek. Hope this continue to move in the coming days. 🙂

    Comment by Shan | January 6, 2011 | Reply

  23. thanks for the info on ore sir gus. Do you know if they are going to start shipping?

    Comment by Bu$h | January 6, 2011 | Reply


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