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drbubb

Undervalued PH stocks: Technicals, Fundamentals, & 3A

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ROLLING OVER? Led by MEG possibly

MEG / Megaworld... vs.AGI, PSEI ... update / Last: P4.80 -0.04, -0.83% /

MEG is weaker than PSEI (7,972, +0.21%), and may be sliding away from resistance near P4.95 > 10d

HHGZZnx.gif

I think MEG is right now a key bellwether to watch, since it was the strong property sector which has helped to hold up the PSEI,

after it made a record high back in Jan. 2018

PSEI (7,972, +0.21%) - maybe be backing off from "round number" resistance at 8,000

exZrx1G.gif

STOCKs - in terms of Gold prices

Here's the chart for US Stocks, the S&P 500 in Gold ounce - shows the "echo bounce" since 2016 and earlier

 How much?  The SPX is now near 2.0x Gold oz, but could be rolling over into a deeper slide

jt4XOjO.png

Similar chart for Philippine Stocks vs Gold

jd0GhXa.pngxx

This is imperfect. since I divide the Php price of PSEI by Gold in in US dollars. However, It also shows a stock rollover may be underway

image.png

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JHK's future scenario might match that of Robert Prechter :

James Howard Kunstler – We May Not Have a 2020 Election >

===

Howe & Strauss who have looked at Generational Cycles are more optimistic

In the first part of this three-episode series, Real Vision co-founder Grant Williams sets out on another journey of discovery. Williams goes on the road to speak with Neil Howe, author of “The Fourth Turning.” According to Howe, there’s plenty to learn about the future by looking at the past. Kicking the series off, the two consider the ironic phenomenon whereby human actions intended to mitigate natural cycles actually tend to exacerbate the downturns in those cycles. Looking at generational patterns, cultural trends, and the cyclical nature of history, Howe and Williams discuss the challenges that the combination of cycles and human hubris pose to markets and to society. Filmed on April 3, 2019 at several locations in the Washington area, including Neil’s home and Great Falls National Park on the Potomac River in Great Falls, Virginia.

Pt1.: The Fourth Turning Explained - Boomers vs Millennials Generational Crisis (Neil Howe Grant Williams)

 Pt2.: Generational Power Transfers During Political Crisis (Grant Williams, Neil Howe, Harald Malmgren)

 

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It is all about LEARNING LESSONS - says top US Hedge fund investor, Ray Dalio -

"in order to beat the market, you need to think differently, be an independent thinker"

Ray Dalio: "Principles: Life and Work" | Talks at Google 

"You have to understand the Art of thoughtful disagreement" - Dalio

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TBGI had a good day.   Up 0.02 to 0.345 ( > more  than 6% ) on Good volume, 50M

sS8EuSg.gif

TS says:

"Yup, that entry point was highlighted in messages in this viber chat (those who have been here last week would hv seen those messages)."

"Why is TBGI undervalued? Only 1.3 B mkt cap now at 0.345 (what more at 0.315?). Considering a backdoor shell's asking price now is 600 mil with no assets at all.'

"Most important is to read all past disclosures of TBGI at PSE Edge. Then each person can make his own judgement."

> edge.pse.com.ph

I bought a decent amount myself last week at PHP 0.32

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10 year charts for the 3A stocks - I still favor TBGI (over the others) based on these charts

TBGI / Transpacific Broadband Group Int'l ... All: 10yr: :5yr: 2yr: 1yr: 6mo: 10d / last: 0.325

xdrgH2Y.gif

ATN / ATN Holdings ... All: 10yr: 5yr: 2yr: 1yr: 6mo: 10d / last: 1.13

LCktnZl.gif

RCI / Roxas & Co. ... All: 10yr: 5yr: 2yr: 1yr: 6mo: 10d / last: 1.81

TCKMHOB.gif

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ROLLOVER ? There was a 157 point, +1.94% jump in PSEI on Tuesday on Inflation News.

Does that rise change the Bearish picture? No!  Not for me

Rollover?  I am sticking to my guns.  Despite the rally yesterday.  Watch AGI & MEG as bellwethers. They remain weak

MEG / Megaworld... vs.AGI, PSEI ... update : 10d / Wed: MEG: 4.93 -0.40%, PSEI: 8,119 -1.18%, AGI: 11.72: -0.17%

4M0hCqy.gif

If you read charts they way I do, we may soon find out how effective AGI & MEG are as bellwethers. 

I think they are signalling buyer resistance, and weakness in the all important property sector (for PH).

In US: The impeachment thing is a hoax, to try and give the Dems something to run on in 2020. 

It will soon be steamrolled by IG reports on Dem misbehavior. 

The Deep State may use a recession and money tightness to try to undermine Trump's presidency, when the impeachment madness fades

IN EDIT: Midday Wed:

Speaking of spreading “cracks” - see this today/wed.Noon ?:
ALI:        Ayalaland: 47.65    -1.35, -2.76%
SMPH:  SM Group: 39.60    -1.00, - 2.46%
vs.:
PSEI:     PS Index : 8105 - 111.89, - 1.36%

ALI -etc. 10d chart

b4rF8lS.gif

Home Business Corporate News Ayala Land income hits P23B in Jan-Sept ... Revenues from commercial leasing increased by 16 percent to P27.6 billion, while those from shopping centers rose by ... Today's Front Page November 06, 2019.

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ROLLOVER, Crack Phase#2 ? Is it ALI's turn to lead stocks lower?

ayala-land-logo_E5AB2B8EAB284713A8B02A12

Watch! Will we see a further rise in volume and more follow-thru on Thursday?

ALI-etc: ... 6mo : fr. May 5, 2019 : 10d/

ALI: 47.00 -4.08%, SMPH: 38.80 -4.43%, PSEI: 8026 -2.32%, MEG: 4.86 -1.82%, AGI: 11.50 -2.04%

4gaQRaA.gif

Some Property related comments from TS's 3A viber chat

TS: What's your view on physical properties?

DB: OVERPRICED. And especially new properties which are overpriced by maybe 20-30% vs the secondary market,  Yields are poor on new properties.  Buyers will need at least 5-10 years to breakeven

Some properties in the secondary market with yields on 8-10% or more may be worth buying, But not in places like Manila Bay, where rental yields are propped by temporary factors, which may be reversed in POGOs move to specific areas, and away from M-Bay

Property stocks will rollover as awareness spreads that there is INTENSE buyers resistance to the high priced new properties.  (This phase is called "buyers remorse", since after the turn buyers of new properties will regret their purchases, and developers will be left with a glut of returned and unsold properties.  Banks may even choke, and refuse to finance the very high balloon amounts, presently on offer - like 80% at Completion. Ugh! They will need more bank finance than they are worth.)

/Added in edit - "The 80% Balloon Problem"/:  Many Buyers now can pay just 20% over the 4-5 years up to completion.  Previously, they needed to pay 50% or so.  The Balloon of 80% is also on a much higher price - with a lower prospective yield than 3-5 years ago, because Rents have not kept pace with rising property prices. To be honest, the 80% which will be remaining due before the keys are handed over is probably more than the saleable value of the property (in the secondary market) at the time it is purchased.  So buyers are really buying an Call OPTION, and betting on a rise in the value of their under-construction property.  If the rise does not materialize, it is likely they will NOT proceed to pay the balloon amount, especially if they need to borrow to fund it.  In addition, under MACEDA law, they can get back HALF of what they paid, so a defaulting buyer will be expecting 10% back from the developer, leaving the developer with a cushion of only 10% on an overvalued property. 

(Is this not a formula for disaster?  Why are so few people talking about this?)

(Are you sorry you asked?  haha)

TS: Nope because that would have been my answer too and maybe even more dire

As proven by history, bubbles normally correct the rise by as much as 80% in 3 years. Recall that I put here the screen shots of my forecast of a bubble top for bitcoin right at the 20,000 level in Dec 2017.  I said it will fall by as much as 70-90% in 2-3 years.  I was wrong. It fell by 80% in one yr.

DB: (Something that annoys me off is how totally IGNORANT the sales people are within the big developers.  They don't know what YIELD is.  If you ask them how much a property will rent for, they tend to invent "Daily" rates from the AirBNB market, and then multiple those figures by x30 days.  This is highly. er, disingenuous, and gives highly inaccurate yields - since Airbnb properties rarely rent out from more than 50-65% of a month, and there are extra costs in running a Short term airbnb business. haha.

TS: I prefer the Warren Buffett way of being in stocks than property. Oh not just stocks but all tradable instruments and both on the long and short side, if warranted.

DB: ILLIQUIDITY may become a big problem in the property market soon,,, as the mainland Chinese who bought here find that they cannot sell their completing properties at anything near the prices being listed by developers.  Then we may see a very swift correction of 20-30% in prices of New properties

( BTW, there is a regular Saturday morning meet up in Makati. Where we discuss property investing.  My views are informed by conversations I have had with many people at those meetups.)

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“Property will keep going up... in the Long Term" / NO !
FERTILITY SHIFT: THIS will kill the Global Property Boom (eventually)
Why?  Educated urban women want fewer kids, below Replacement rates

The World's Shrinking Population


Dire predictions about an impending overpopulation crisis have loomed large in the human imagination for centuries. Darrel Bricker and John Ibbitson co-authors of, "Empty Planet: The Shock of Global Population Decline," say these predictions have been greatly exaggerated. In fact, the global population is on the decline. They join The Agenda to discuss a shrinking planet and the myriad challenges it poses.

"DEMOGRAPHICS are (already) Weakening... in Most developed countries -says Harry Dent.

"Australia may lead the next bust"

Harry Dent Says The Bubble Still Has To Burst!

 

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The Second peak (this one in Property) may kill off PH Stocks

Note that Property stocks now seem to be PAST their Peak, as ALI cracks

PSEI vs-Property Stocks: ALI, SMPH, MEG ... 4yr: 3yr / Last:

7XHi8nI.gif

 

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See any CRACKS here?

/ PH-10d Charts: 3A: ALI-etc: BDO-etc: PowUt: HiDv:

AGI: 10.54: -6.55%, MEG: 4.86 -1.62%, ALI: 46.50 -1.06%, PSEI: 8,014 -0.74%,

goKU4qF.gif

xx

 

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For those who think that Ayalaland is the most successful PH property stock, take a look at THIS chart

RLC / Robinsons Land -vs: ALI & SMPH ... All-data : 10yr: 5yr: 2yr: 1yr fr.11.08.18/ RRLC: 26.70, ALI: 47.00, SMPH: 40.00

6cY3co0.gif

fr.11.08.18: fr.: Nov2018w/MEG : 6mo: 10d/ RLC: 26.70, ALI: 47.00, SMPH: 40.00, MEG: 4.90 - r/a= 56.8%

HZ8vmCQ.gif

John Gokongwei, the founder of RLC has just passed away this weekend,

1_16a084deefc.2232717_214013855_16a084de

> Filipino tycoon John Gokongwei, Jr.: From riches to rags to riches/ more

So i took a look at RLC since it started trading (see above) and was surprised to find that RLC outperformed ALI, though not SMPH, since its listing back in 1995, 25 years ago.

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Two 3A stocks may soon finish their correction (together?)

RCI vs. TBGI & ATN ... update : rci-etc / rci: 1.91, tbgi: 0.33, atn: 1.14 = r-28.9%

59OFaVD.gif

TS: "Although nothing is that sure in financial markets, both RCI & TBGI look constructive. Barring any global panic or force majeure, both are showing dwindling selling pressure for the moment. Low of RCI today was 1.88 and low Nov 6 was 1.74. TBGI low today 0.325 and low Oct 10 was 0.31."

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ROLLOVER Narrative is still ALIVE - a Right Shoulder (RS) in place now?

Here's why I am sticking to the Rollover narrative - on these property-related stocks

ALI vs. RLC, smph, MEG, AGI (weakest) ... update : fr.5/19 : Prop.Cycle-3yr : 10d : / ALI:

2Iu4dsy.gif

The bigger picture, as shown on page 1:

KEAT91m.png

BTW, if property stocks did peak in July 2019, then there is likely to be a very obvious downturn in the physical property market within 6-12 months after that peak, if the usual historical pattern holds.  I have watched this pattern unfold in: the UK, the US, and in HK.

( It does take some confidence in technical work, to come out at key test moments and repeat the reasons why I stick to my guns,  I have done this more than once. I can be wrong, and with these very precise charts, I will probably know pretty quickly, if I have it wrong,  Yet, so far so good. haha. I actually don't mind when people disagree with me.  Because I will change my view pretty quickly, if the evidence comes in.. showing my narrative is no longer valid.  I think it is a bit like a horse race.  There may be a horse out there with my colors on it, one that I supported.  But if another narrative gets stronger, I am willing to change my bet. haha )

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COMMENTS on Property - from a Viber chat

Q: What is the outlook for property in 2020 for the Philippines? Is it advisable to still buy or sell given the pervading environment ? (PL)
A1:
If ALI falls below the 252d/One Yr Moving average (where it is now), as I expect, I would be very cautious, especially on over priced new properties.  And especially if it slides sharply lower. (DB)

ALI / Ayala Land vs.- SMPH, PSEI, MEG … from May 2019 / ALI: 46.50, SMPH: 39.90, PSEI: 8,012, MEG: 4.85

QWv0MHP.gif
A2:
Perhaps each person should ask himself: what would have been Metro Manila property prices and sentiment if the POGO did not happen? … Also, even in financial instruments, having a view for specifically 2020 is like slicing the cake too closely.  Since property is far less liquid, a view of 2020-2025 is probably better perspective.  And for that, my personal view is that global equity markets will be far weaker.  And if so, many other asset classes worldwide will follow suit. (TS)
A3:
I am willing to be more specific (and more wrong) than TS.  New properties are overvalued by at least 20-30% relative to the second hand market,  In my view, that excess will begin to be corrected in 2020, and it will take at least 3-5 years to correct.  Some extreme sales may be more than 30% below current levels… Almost no one who buys new properties in the second half of 2019, will be able to cash an easy profit, until the next up turn in the cycle.  No probs.  I sold one property this year, and may replace it.  But I am looking for a bargain in the secondary market, where I would expect to get a 10% gross yield - maybe more. (DB)

Q: How to get a 10% Yield?
A:
BUY CHEAP.  Know the rental value, and don't pay more than a price that would give you a 10%+ yield.  The PRICE in the secondary market is set by buyers and sellers, and a Cash buyer has strong negotiating power when there its a motivated sellers.  There are properties I am looking at now that meet my target.  Each has certain advantages and disadvantages

Q: Perhaps then more real estate bargains will be available in 2020
A:
Yes.  That is very likely.  So I am in no hurry.  But if I buy cheaply enough, I can enjoy some good cash flow, while I await better bargains in 2020-23
====

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ATN under pressure! - broke P1.10 support with Heavy volume

ATN / ATN Holdings ... 3mo / Last: 1.08, -0.02, vol. 1.59 Million (so far, at midday)

uNo0WNY.gif

xx

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The Rollover (of PSEI & some key property stocks) continues

ALI vs. PSEi, MEG, SMPH ... 2yr :1yr: 6mo: 10d /

GSmONuq.gif

ROLLOVER evidence?

Tough day for ALI & PSEI. at close:
PSEI : 7,881 : -52.02, - 0.66%
ALI   : 44.90 : - 1.05, - 2.29%
MEG :  4.70 : - 0.08, - 1.67%

Even tougher for two 3A stocks
ATN :  0.90  :  - 0.14, - 13.5%
TBGI :  0.31  : - .015, - 4.67%
RCI   :  2.00  :  +0.08, +4.17%

Comment on ATN:

"Shareholders approved a 0.20 debt to equity conversion. That's why the stock has weakened. It is emotional trading now. At some point, bargain hunters will come in and the stock would bottom out and start to recover. At that point (usually selling pressure abates after 5 business days), the determining factor to price will be once the company sells its inventory of crushed rocks of which the value they have disclosed before."

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ATN Balance Sheet
 
Period Ended
Fiscal Year Ended (Audited)
Sep 30, 2018 : Mar 31, 2019
Current Assets 40,403,820.      : 41,282,235
Total Assets 3,517,475,108. : 3,487,998,425
Current Liabilities 107,984,960.     :       49,280,416
Total Liabilities 1,401,223,338 : 1,368,425,174
Retained
Earnings/(Deficit)
1,645,332,632    : 1,648,654,113
Stockholders' Equity 2,116,251,770 : 2,119,573,251
Stockholders' Equity - Parent - -
Book Value per Share 0.47                     : 0.47

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ATN shareholders have approved a FAR BELOW BOOK (0.20 vs. 0.47 Book value)  PLACEMENT it seems

Mar.2019: PHP 2.119 Bn / 0.47 = 4.5 Bn shares OS ... Mr NG held 2.76 Billion shares = 61%

[Amend-1]Results of Annual or Special Stockholders' Meeting Nov 15, 2019 07:39 AM  

This is to notify that ATN Holdings, Inc. held its regular annual stockholders’ meeting on November 14, 2019 at the Ground Floor, Summit One Tower, 530 Shaw Boulevard, Mandaluyong City. The meeting started at 1:00 PM and adjourned at 3:20 PM.

Stockholders representing more than 70% of the issued and outstanding shares were present in person or by proxy.

The president reported the highlights of the previous year’s operation, audited financial statements ending March 31, 2019, and the acts of the Board and the executive officers during the above fiscal year. The Corporate Secretary read to the stockholders the minutes of the previous annual stockholders’ meeting of November 8, 2018.

The stockholders in said meeting approved/ ratified the following matters:
(1) the minutes of the previous annual stockholders’ meeting,
(2) the audited March 31, 2019 Financial statements,
(3) the management’s discussion of the Annual Report for the year 2019
(4) the appointment of R.R. Tan and Associates as external auditor,
(5) increase in Capital Stock from 12,000,000,000 shares to 24,000,000,000 shares with a par value of P0.10 per share and a subscription price
of P0.20 per share
(6) subscription of Unipage Management, Inc. of 2,325,055,429 shares and Arsenio T. Ng of 824,944,571 shares at a price per share value of
P0.20 per share,

(7) waiver of the majority of the minority shareholders to conduct a rights/public offering with respect to the subscriptions referred to in the
previous item,
(8) issuance and listing of the aforementioned subscribed shares in compliance with the requirements of the Securities and Exchange
Commission and the Philippine Stock Exchange;
(9) all prior acts, resolutions and decisions of the Board, officers and management

List of elected directors for the ensuing year with their corresponding shareholdings in the Issuer
Name of Person Shareholdings in the Listed Company Nature of Indirect Ownership  
Direct Indirect  
Arsenio T. Ng 2,763,541,260 0 n/a

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Ayala Corp is testing KEY SUPPORT near P800

AC / Ayala Corp ... All : 10yr : 5yr : 3yr : 1yr : 6mo : 10d / Last:

a77LsQF.gif

AC & ALI / Ayalaland ... all : 10yr : 5yr : / Last: 42.55 -1.35, -3.08% / 784.5 -35.5, -4.33% = r-5.42%

MoYWoNI.gif

Megaworld on the Edge?

MEG ... all-data : 10yr : 5yr : 3yr : 1yr : 6mo ; 10d / Last: P 4.45

vHlYICi.gif

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MEG on Key Support ... update / Last: P 4.35 

DbegI0j.gif

+ ALI & SMPH continue rallying as MEG / Megaword falls another 1.81% to P 4.35

+ MEG low for the year is near at P 4.30

+ AGI (Alliance Global) closed at P 11.06 -vs. Yr.Low of 10.34

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