Buying, selling in present mart
I’ve been on selling mode since two weeks ago due to several fundamental and technical developments just waiting to materialize into real danger. Before the close of trading last Friday, however, I also bought into the market as I believe there are still stocks that are within reasonable buying price limits.
To recall, the market immediately logged a net gain of 151.36 points or 2.57 percent by the end of January. This was followed by another net gain of 388.8 points or 6.44 percent in February, bringing the market’s total advance for the year to 540.16 points or 9.17 percent.
In the process, overall earnings multiple or price earnings ratio (PER) of stocks in the PSEi and All-Shares indices were driven upwards. The PER of PSEi stocks for the week ending Jan. 31 rose to 18.36 times. This went up further to 19.21 or 4.63 percent for the week ending Feb. 28—and then to 19.4 times the following week ending March 7; All-Shares index stocks correspondingly rose to 18.26 times, 18.91 times and 18.98 times, respectively.
A quick look at some of the financial ratios and market statistics from some top gainers—using collated price data for the week ending March 7—may help provide direction in this current market.
Of late a market gainer, Pancake House Inc. (PCKH) had a closing price of P24 a share. At this price, PCKH was down 11.11 percent from the week before but 60 percent up from the month before. At this price, PCKH was trading at 32.68 times PER and 6.66 times PBV. At this price as well, PCKH was still 36.84 percent away from its 52-week high of P38.
Puregold Price Club Inc. (PGOLD), a more popularly traded “company for the distribution of goods and commodities,” closed at P44.95. This was 3.75-percent higher than the price the previous week and 15.26 percent higher than the level a month before. At this price, PGOLD was trading at 34.96 times PER and 4.13 times PBV. At P44.95, too, PGOLD was just 3.05 percent away from its 52-week high of P47.50.
Megaworld Corp. (MEG), a company “engaged in the development in Metro Manila of large scale mixed-use planned communities and townships,” had a closing price of P4.19 a share. This was 4.6 percent up from its price a week before and 11.22 percent higher than its price a month before. At this price, MEG was trading at 16.39 times PER and 1.71 times PBV. At this price, too, MEG was now just 2.55 percent below its 52-week high of P4.31 per share.
Ayala Land Inc. (ALI), a company of similar theme as MEG, had a closing price of P28.40. This was 3.52 percent lower from its price a week before and 8.60 percent higher from its price a month before. At this price, ALI was trading at 33.81 times PER and 4.25 times PBV. Unlike MEG, however, ALI’s price may still climb, for its traded price of P28.40 was still 20.45 percent below its 52-week high of P35.70 per share.
Energy Development Corp. (EDC) is a leading company in geothermal energy. At its closing price of P5.48, EDC was trading at 14.88 times PER and at 2.95 times PBV. EDC’s 52-week high was P6.68 per share. This is still 18.09 percent above EDC’s last traded price of P5.48. No wonder, EDC closed higher at P5.53 a piece last Friday.
In conclusion, even as most stocks are looking ripe for profit-taking, you can still find stocks that seem good enough to buy.
The writer is a licensed stockbroker of Eagle Equities Inc. You may reach the Market Rider at [email protected], [email protected] or at www.kapitaltek.com
