Uploaded byAndrew Stotz, PhD, CFA
Watching The Street: Philippines
The document presents a financial analysis of the Philippine market as of July 28, 2016, highlighting rising consensus recommendations and key companies to watch, including First Gen (fgen) and Petron (pcor) as top performers. It also discusses earnings growth estimates, revealing stable average growth rates but some discrepancies in analyst predictions, particularly for companies like Jollibee Foods (jfc) and Philippine Long Distance Telephone (tel). Furthermore, the report notes volatility in expected returns, particularly for International Container Terminal Services (ict) and other firms with low growth outlooks.
Watching The Street: Philippines
- 1. Presented by: Dr.Andrew Stotz, CFA 16 August 2016 Watching the Street: Philippines
- 2. 28 July 20162 Companies with the most positive recommendations Companies with the most negative recommendations Sources: A. Stotz Investment Research, Thomson Reuters Note: For methodology explanation visit BecomeaBetterInvestor.net/blog/how-to-benefit-from-our-watching-the-street-charts/ Consensus recommendations in the Philippines have trended upwards and the country is now a Buy in Asia The two companies with the most positive recommendations: FGEN is the number-three supplier of electricity in the Philippines and PCOR is the largest oil refining company in the country JGS, DMC, AEV and LTG are all conglomerates spanning over a large number of industries with their investment companies Philippines: Consensus recommendations Bottom-up country relative consensus recommendation Company name RIC code Sector Mcap (US$m) 3MADTO (US$m) First Gen FGEN.PS Utilities 2,230 1.7 Petron PCOR.PS Energy 2,247 1.6 Metro Pacific Investments MPI.PS Financials 4,386 4.9 Robinsons Land RLC.PS Financials 2,866 1.6 Megaworld MEG.PS Financials 3,548 4.0 Company name RIC code Sector Mcap (US$m) 3MADTO (US$m) JG Summit Holdings JGS.PS Industrials 12,982 6.5 DMCI Holdings DMC.PS Industrials 3,639 1.5 Aboitiz Power AP.PS Utilities 6,887 2.1 Aboitiz Equity Ventures AEV.PS Industrials 9,756 3.1 LT Group LTG.PS Industrials 3,642 1.4 Neutral Neutral Neutral Neutral Buy 1 3 5 7 9 1 3 5 7 9 2012 2013 2014 2015 YTD16 Philippines Buy Sell
- 3. 28 July 20163 Companies with the highest consensus EPS growth estimates Companies with the lowest consensus EPS growth estimates Sources: A. Stotz Investment Research, Thomson Reuters Note: *Available 12 month forward EPS estimates. For methodology explanation visit BecomeaBetterInvestor.net/blog/how-to-benefit-from-our-watching-the-street-charts/ Consensus EPS growth estimates have been stable over the past 5 years, on average 11%. However, analysts were only fairly accurate in 2014 JFC owns the fast food brand Jollibee that has been referred to as Asia’s McDonald’s, as well as being the franchisee of international brands such as Burger King TEL has faced tough competition in the mobile segment and lost market share to Globe Telecom (GLO.PS) in recent years Philippines: Consensus earnings estimates Consensus EPS growth estimates versus actual EPS growth Company name RIC code Sector Mcap (US$m) EPS g* (%) Jollibee Foods JFC.PS Cons. Disc. 5,757 42 Bank of the Philippine Islands BPI.PS Financials 8,173 24 LT Group LTG.PS Industrials 3,642 24 Universal Robina URC.PS Cons. Staples 9,252 23 SM Investments SM.PS Industrials 17,506 22 Company name RIC code Sector Mcap (US$m) EPS g* (%) International Container Terminal Services ICT.PS Industrials 2,895 (22) Phil. Long Distance Tel. TEL.PS Telecom 9,454 (13) Cebu Air CEB.PS Industrials 1,287 (5) Metro Pacific Investments MPI.PS Financials 4,386 (1) Manila Electric MER.PS Utilities 7,593 0 12 12 10 11 11 (10) - 10 20 2012 2013 2014 2015 2016 Actual EPS growth Consensus' estimate - 1yr fwd (%, YoY)
- 4. 28 July 20164 Companies with the highest consensus target price expected return Companies with the lowest consensus target price expected return Sources: A. Stotz Investment Research, Thomson Reuters Note: *Actual return from March 2016 to year-to-date. For methodology explanation visit BecomeaBetterInvestor.net/blog/how-to-benefit-from-our-watching-the-street-charts/ Both the actual return and the estimated upside has been rather volatile in the Philippines. Analysts were only fairly accurate in 2013 ICT has the lowest EPS growth estimates, but among the highest target price expected return. Analysts are cautious on the outlook for the company’s ports in South America, Australia and Congo The companies with the lowest expected return have all seen their share price go up by 20% or more YTD Philippines: Consensus target price Consensus target price expected return versus actual return Company name RIC code Sector Mcap (US$m) Up/Dn (%) Energy Development EDC.PS Utilities 2,365 23 International Container Terminal Services ICT.PS Industrials 2,895 23 First Gen FGEN.PS Utilities 2,230 20 Semirara Mining SCC.PS Energy 2,725 19 Petron PCOR.PS Energy 2,247 19 Company name RIC code Sector Mcap (US$m) Up/Dn (%) Aboitiz Equity Ventures AEV.PS Industrials 9,756 (30) SM Prime Holdings SMPH.PS Financials 18,471 (20) JG Summit Holdings JGS.PS Industrials 12,982 (14) Security Bank SECB.PS Financials 3,385 (13) GT Capital Holdings GTCAP.PS Financials 5,840 (9) (9) (18) 6 (0) 5 (1) (40) (20) - 20 40 60 2012 2013 2014 2015 2016* 12mth fwdActual return Est upside (%)
- 5. 6 May 201628July 2016 5 Want more of our research? Sign up for our free newsletter at: BecomeaBetterInvestor.net/join