Cebu Property Venture - a disrespected public company

The company according to PSE website is engaged in real property ownership, marketing, management and development. They are based in Cebu and they owned and develop Asiatown I.T. Park which is the premier destinations of BPO companies looking to do business in Cebu City. It is a joint venture company between province of Cebu and Ayala Land Inc. and became a 75% owned by Cebu Holdings Inc.

Why it is disrespected? Building owners inside Asiatown IT Park are violating agreements made with the company. Parking lots in the buildings are converted into canteens, eateries and office spaces. Greed really is the name of the game for these building owners who violated the covenant just to maximize returns not minding the community as a whole and that they are part of it.

The effect, congested roads since most of the cars can't park inside the building. On any given business day you can see cars lining up the streets since they can't park inside the building anymore. One just wonders why OBO allowed the construction and modification of these structures. Somebody for sure had been paid under the table just to get things done improperly.

My warning with incoming locators and investors is to avoid renting\relocating in these buildings since if they can't follow agreements with a public company they will surely do similar things to you when the time and opportunity comes.

The Buildings:
1. I1 building which converted their second floor parking area to canteen. It is owned by Primary group of companies with Wally Liu as the CEO.
Website: http://www.primaryproperties.com.ph

2. Skyrise 1 Building which converted their ground floor parking lot to office spaces. They also bore a hole in the basement going to the Skyrise 2 building. I'm not even sure if the building is structurally sound anymore. It is owned by Skyrise Realty and Development corp. with Harry Valloria as its President.

Click on the link to view Asiatown IT Park in Cebu: http://www.asiatownitpark.com

The San Miguel Promise

Last month, I attended the corporate roadshow of San Miguel Corporation. The companies they invested are leaders in their industries. I was impressed not just with the amount of dough they invested to acquire these companies but also on how they strategically position themselves in major Philippines industries. From a simple beverage making company, they became a conglomerate with multiple interests in different key economic areas. One speaker said that investing in San Miguel is like investing in the country's future. I believed them especially on the long term.

However, I was dismayed when they suspended their share in PSE for 14 days. Their excuse: to prevent speculation. I respect their views but I think this is part of what's driving the market. We always have speculators. Pity those who invested in SMC when it was 150+ cause they have to wait for 14 days. Such a waste of opportunity.

PSE should not just suspend shares because of some silly excuses, this would hurt small traders and investors. Although their transactions are minute compare to large institutions, it discourages them from believing in the market. Our government is already perceived corrupt and easily manipulated by shady people, I don't want this highly respected institution to be in the same league as well.

Still, I believe SMC will bounce in 1 to 2 years. I believe in the industries they go into and I believe it will generally benefit the country economically.

PLDT buying Digitel - and then there were two

What's in it for the consumer:
1. Digitel's Sun Cellular is a pioneer in unlimited text and call promo. Other telcos were forced to offer more or less the same promo because of Sun. I'm not sure if the new Sun under PLDT/Smart will offer the same.

2. With the acquisition, the new Sun Cellular can then piggyback on PLDT/Smart infrastructure that results to wider coverage and fewer dropped calls.

What's in it for the stockholders:
1. DGTL posted a net profit of 429 million that's a 65% increase from last year with 15 million subscribers. That's a boost for PLDT/Smart whose subscriber based is more or less flat.
2. In terms of competition, Globe telecom of the Ayala group is the only real competition of PLDT/Smart/Sun. But in terms of subscriber based it only has 25 million against 60 million(Sun subscriber included). This should increase the stock price of the two competing telcos in the short term.

Given the mideast crisis and the Japan tragedy that affected our local market. I would recommend a buy on PLDT and Globe for long term.

Buy on Bargain

Philippines stocks continue to slide due to global dynamics. With Middle East crisis, China raising interest rates and U.S. economy picking up. Foreign investors are dumping local stocks resulting to what they call bloodbath.

My take on this one is that make this as an opportunity to buy more stocks of companies that have sound business models and good potential upside. Those companies whose earnings are in record highs and are projected to continue their winning streak will eventually correct.

End of Week Invesment Report

In Wall Street - Positive Corporate Earnings, Rosy Jobs Market and Increase Costumer Spending seems to temper the crisis in the Middle East. However, oil continues to climb while neighboring Middle East countries try to address growing concerns of their respective citizens.

Australia is also poised for recovery after 2 natural disasters(Floods and Cyclone Yasi) struck them. Availability of Australian coal will depend on how long they can secure those mines.

In the Philippines, I advise you to consider the following stocks:
1. SCC - Semirara Mining Corp. - Prices of Coal orders almost doubled due to Australian issue. Sell this stock when it reach Php270

PSE Stock Info: SCC

2. JFC - Jollibee Foods Corporation - Prices went down because of market fluctuation due to the Middle East problem but it has a great upside potential. Sell this stock when it reach Php85

PSE Stock Info: JFC

Philippine Economy grew 7.3 percent

Main Drivers of Growth:
1. Higher dollar remittances from OFW
2. Mining
3. Construction
4. Manufacturing
5. Business Process Outsourcing

Effects in the Local Market includes:
1. Higher revenues for banks
2. More development for real estate companies
3. Improved consumptions on food and beverages
4. Improve revenue on power and energy

Expect another stellar performance of the local companies in each of the business sectors affected. Invest in these sectors and see your investments grow for the rest of the year.

Middle East Factor

There is a spreading discontentment in governments around Middle East from Tunisia and now Egypt.
It already is affecting the last day of trade this week and I believe it will continue to do so next week.

For those who wants to by, I advise to wait for the bottom of this before taking action. For those who wants to sell, sell cautiously so it won't compromise your position.

"Buy when there's blood on the streets"

Stock Investing is never a gamble if...

1. You do it for long term purposes
2. You select stocks of businesses which have good fundamentals and proven track record
3. The company behind the stock has sound business model
4. You follow expert's analysis on a regular basis
5. You won't let your emotions take over decisions on short term fluctuations

Universal Robina Corp - Undervalued - BUY

As of this writing, URC price plunged to 33.

Southeast Asia's Leading Branded Snacks and Tea Producer succumbed to market sentiments. However, you can never trade away the fundamentals of this undervalued company.

1. They have over $1billion dollars in sales
2. They are spearheading the use of sugar substitute that increases margins of their products
3. The products they carry are leaders in their categories which ranges from Snacks, Candies, Chocolates, Cookies, Pretzels, Canned Beans and Tea

C2 Ice tea, Chippy, Cloud 9, tortillas are just examples of well-known brands they carry.
The current market price is so attractive that the company is even buying back some of their shares.

Analysts estimates that shares should be worth 41+.

Website: www2.urc.com.ph
PSE Stock Info: URC

Stocks you must buy on Weakness

The past several days, we see the market going down sharply. It's an onslaught and it's the opportunity to buy stocks that are either undervalued or have 15% or more upside.

I personally recommend the following stocks:
1. Cebu Pacific - CEB
2. Universal Robina - URC
3. Aboitiz Power - AP
4. Filinvest - FIL
5. First Philippines Holdings - FPH
6. Energy Development Corp - EDC
7. International Container Terminal - ICT
8. Rizal Commercial Banking corp. - RCB
9. Metro Pacific - MPI
10. Robinson Land - RLC

These stocks give you the best possible returns when the market becomes bullish again.

Trade on!!! :)