TEL: Where To Now?

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After all the negativity that lurked in the stock market(and I guess it is still lurking out there in Europe), the Philippine Stock Exchange is again in the positive and 5,000 level area. 

source: http://www.pldt.com.ph/

One of the stocks everybody would probably want to have in their portfolio is TEL(PLDT). I once posted here about TEL's not so stellar performance in 2011, when PLDT chairman Manuel V. Pangilinan announced in their  FY 2011 Core Income Reports that they are not expecting to have a very bright 201 and even maybe in 2012 but rather see this as a period of re-alignment in connection to PLDT's acquisition of Digitel. And as everyone knows, PLDT's share have gone done to as low as 2300 levels for the past months which believe was mainly due to the issue on the capital requirements which finally resolved.

Looking at the chart today I see some sudden rise in the past 3-4 days even in the midst of the turmoil in the stock market world.

When I read and have seen that PLDT started to go south I started buying blocks of shares to take advantage of the low price of this blue chip but having to chunk out huge portion of your portfolio did have a drawback. One is that I missed out profit taking on small stocks that went up during those bearish months. Another is that PLDT's share price didn't really drop at an instant but slowly thus I ended up not effectively cost averaging and have to stop buying when TEL was nearly 50% of my portfolio.

A little more and I can see the fruits of my patience.

Some good news I am hearing are below:

• PLDT's branding alliance with SM
• PLDT sees better second half of 2012
• PLDT eyes TV station in Indonesia  

 With that, I guess PLDT is again positioned to achieve its stellar performance in 2010 of having an all time high net income of 42 billion.

As for me I am crossing my fingers and hope that in the coming months my patience pays of with TEL.

Analyzing two companies of the same industry

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source:http://getyourbizsavvy.com/

 

The best way to determine whether one company is better than the other is by comparing one to another company of the same industry.

For illustration purposes lets look at ABS and GMA7, Philippines top channels.

ABS   GMA7  Closing Price 08/06/2010             45.30           5.95 EPS               2.23           0.58 P/E %             20.36         10.26 52 week range  25.50-45.30   5.60-8.80  Par               1.00           1.00 2009 Income  1.7B   2.8B  Board Lot           100.00       100.00

Based on the data above one can make decision which stock to buy.

If you look at the two there is a huge difference in the price. Higher EPS indicates two things, one is that the other company has a bigger net income and the other company may have a smaller number of shares outstanding. As you compare GMA7 has a higher net income than ABS but ABS has higher EPS meaning ABS has a smaller number of shareholders...meaning the income is shared by a smaller number of people. P/E % of ABS is higher than GMA7 which might indicate that more people have confidence in ABS but it also means because of this confidence level ABS might be overpriced as compared to GMA7.  With these bits of info one can decide which to invest in. One pointer is that both companies are doing well... both has a high P/E %, Price range is wide meaning catching either stock at its lowest could possible go up again to that high level giving you profit when the timing is right. The only decision point now will be how much free money can you put in. If you have a limited fund GMA7 might be a better stock to buy but if funds are handy go for ABS. Again the above simple analysis are just sample analysis. Every person has his own way of looking at the data. Others rely on Technical Analysis which is a price change based analysis which is studying the price trend and looking at the buy and sell indicators.