Last August 2015, I released a mid-August Investment Guide tabulating the price-to-earnings (P/E) ratios of some public Philippine companies. It was also on that post linked above where I (somewhat po hehe) thoroughly explained what a P/E ratio is and does.
(I'm making this post extremely short para 'di na po kayo ma-bore hehe. Enjoy and have a good one!)
(I'm making this post extremely short para 'di na po kayo ma-bore hehe. Enjoy and have a good one!)
Today, I am posting an updated list of P/E ratios for several PH companies that are being traded in the market. It can be noted that since the one-day 7.20% loss in August 24, some stocks have managed to recover, while others continued their downward trend.
What I discovered is that almost all companies had their P/E ratios lowered which means, from a value investor and share price-point perspective, some stocks are less expensive (or in another sense, cheaper) than they were in August. So, how do these stocks' P/E ratios fare relative to its competitors in the same sector/category?
1. BANKS AND FINANCIALS
It must be noted, however, here that price-to-book (P/B) ratios are better indicators for banks because they have a lot of assets and liabilities that are constantly valued at market prices.
P/E Relatives
Cheapest: UBP, RCB
2. COMMERCIAL AND INDUSTRIAL
P/E Relatives
Cheapest: EEI, IMI, MWC
Some companies are a bit highly priced like media companies ABS and GMA7 because they know election is just several months ahead. And election means big bucks! ICT, if I remember, had a P/E of 30+. Now, it's nearing the 20-level, which means it has gotten a lot less expensive. PCOR, on the other hand, still possibly suffering from losses has a negative P/E. This may mean that investor currently value the stock at or pay 46 pesos for every 1 peso loss made.
3. CONGLOMERATES
P/E Relatives
Cheapest: FPH
FPH which holds shares in EDC and FGEN, if I am not mistaken, has the lowest P/E ratio in this list. Some PSEi listed companies like GTCAP, A, JGS, LTG, and SM all are priced higher.
4. CONSUMER
P/E Relatives
Cheapest: DNL
It's a shocker that DNL is currently having a relatively low P/E (and is the cheapest) considering the fact that it was performing well (skyrocketing extraordinarily) in the past several months. It goes to show that the PH market's overall sentiment could not be estimated. Well, JFC and URC are again two of the most priced (or prized haha) jewels in the stock market. They're some of the investors' darlings; I can say; however, do notice their trends (via Wall Street Journal, PSE Edge, Bloomberg, or your online stock brokers' platform),
Kids (and investors) just love Jollibee and junkfood, I guess hehe.
5. GAMING
P/E Relatives
Cheapest: RWM
The reduced confidence and potential in gaming firms (70% down, yep you're reading that right) in Macau may have had an indirect impact on investor appetite here in the Philippines. To where is the PH gaming industry headed?
6. MINING, POWER, AND TELECOM
P/E Relatives
Cheapest: NIKL (Mining), TEL (Telecom), EDC and FGEN (Power)
We got some extremes in the mining, telecom and power category. On one hand, NIKL is definitely the second cheapest stock in this guide. What has possibly lowered its P/E? Is it China's (a major nickel importer) slowdown? Meanwhile, EDC and FGEN, two power generating firms, are exposing their affordable value as they have the lowest P/E ratios in this power list. TEL, or PLDT, has just gotten a lot more cheap when it neared a 52-week low of 2,240 PHP last September 23.
6. PROPERTY
P/E Relatives
Cheapest: CPG, MEG, VLL
The property category boasts of the widest spectrum with CPG being the cheapest (on a P/E ratio) and real estate giants ALI and SMPH with extremely high P/E ratios. Again, it should be noted that P/E is not the only indicator out there. CPG has a low P/E ratio, but there must be something going on (or probably wala din) which is preventing investors from paying a higher price for that stock. Due diligence should be practiced at all times. Research, research, research. Hehe.
NOTE:
This guide only shows the strength of P/E ratios relative to one another. (I only mentioned what are obvious, P/E wise.)
A low P/E ratio may suggest that at it's current value, it's priced as cheap. But it may also mean that investors aren't just upbeat on it and aren't willing to pay a premium (extra) to own part of the company. On an earnings perspective, a low P/E ratio may indicate that the company has had higher earnings to date which may mean it's a valuable stock for the future, fundamentally, although usually a higher earnings report leads to an increase in the stock price.
However, earnings aren't just the only representation of a company's financial progress. Is a company piling huge debts? Was it involved in any tragedy? Is it hindered by certain legal processes (judicial proceedings, TROs)? Caveat!
