PSE file photo
MANILA, Philippines — COL Financial Group, the country’s biggest online stock brokerage house, is bullish on banks, power, consumer, and even a few contrarian bets from the unloved real estate sector, which is facing a host of challenges this year.
April Lynn Tan, COL chief equity strategist, shared their top 10 stock picks for the year and their respective price targets.
These were Aboitiz Power (fair value target: P45.20), Ayala Corp. (P907), GT Capital Holdings (P940), Metropolitan Bank & Trust Co. (P85.80), Ayala Land Inc. (P40), Robinsons Land Corp. (P26), Jollibee Foods Corp. (P305), D&L Industries Inc. (P11.40), and Puregold Price Club Inc. (P55.70).
Citicore Energy REIT Corp. was also in the list but no price target was available.
Tan said their recommendations focused on larger companies trading at “reasonable valuations” amid expectations local corporate earnings would grow by an estimated 13 percent this year.
Property picks
The two property names, Ayala Land and Robinsons Land, were also included since these were undervalued relative to peers.
“The most controversial call I may have here is property because it’s one of the least liked sectors right now,” Tan said during a media briefing on Tuesday.
“The outlook is not as attractive, with offices suffering from an oversupply and residential concerns about [sales] takeup,” she explained.
“I don’t think it deserves to trade at such valuations [so] it might be good to get a small position [in property],” Tan added.
She said they were expecting Philippine stocks to trend higher in 2023 due to lower inflation and inflows into emerging markets as the United States faces recession concerns.
Tuesday’s selloff
This was despite a brutal selloff on Tuesday that caused the Philippine Stock Exchange index (PSEi) to plunge nearly 200 points.
[T]he story isn’t perfect and there are a lot of risks to the strength of the market and, because of this, we believe the increase in the stock market will be very volatile,” Tan said.
COL chief technical analyst Juanis Barredo said pullbacks were an opportunity to buy.
“I feel we are in the initial part of a bullish market. The initial part of a bullish market is happening when there is a lot of skepticism and worry,” he said during the briefing.
Barredo said the current correction was expected. He noted the PSEi would likely recover in the next few months and move higher to their target of 7,500 up to 8,250. His next support zones were 6,650 and then 6,400 to 6,200 for the PSEi.
“I believe in these next two months you will probably encounter a lot of the pressure you are seeing in the market for a correction, and after that, we will see a recovery. So, that should be a good time for us to be able to make potential buybacks in the market,” he said.