Is it A Buying Opportunity For EDC?

Tweet

source: http://www.renewbl.com

EDC (Energy Development Corporation) had been one of the heavyweights last year due to the various expansion projects within and outside of the Philippines. 

Recently its price drop again to the 5.50 level brought about by the news from Bacman's non-operation. A report from bworldonline.com says that Bacman is expected to operate this year.

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

With the sudden drop in price, in my personal opinion, it is a good time to enter again EDC. Looking at the price chart the stock is now oversold and on its bounce back to the 6.00 level.

Looking at EDC's latest data from reuters.com, the company is in good shape as far as fundamental are concerned. Its Current ratio still stands at 2.63 while Debt to Equity is at 194 which is still within the industry levels.

source: www.reuters.com

I don't know though until where the price will go down further so the best action to take is to buy small chunks of shares at a price lower than its previous closing price. 

How about you what is your take on EDC's latest price drop? Please share your thoughts in the comment box below.

MERalco: Are the lights brighter?

Tweet

source: www.meralco.com.ph

With the recent increase of Manny Pangilinan's First Holdings ownership of Meralco through Beacon Electric Assets Holdings to what direction does Meralco will go?

Once one of the Lopez group's gem, Meralco is the leading power distribution corporation in Philippines. The latest move by the Lopez group to sell most of their subsidiaries to focus on their main business, broadcasting, gave other companies like Manny Pangilinan's MPIC to expand their infrastructure in the Philippines.

The latest movement inside Meralco has been pushing Meralco's market price and it might hit the resistance price of 300 per share. As of last friaday's trading, Meralco's share is at Php 274.00 share.

MVP has been known for his Midas touch and everybody seems to jump in Meralco. 

With the known resistance at 300.00 could we still join the bandwagon and buy MER at 274.00?

Fundamentally, MER is okay with a Current ratio of 1.65 and Debt - Equity of 45.75. Technically with a PE ratio of 26.46, it may seem overvalued already.(Data from http://www.reuters.com/finance/stocks/).

One key development being made by Meralco is the introduction of prepaid electricity use. As mentioned in the Business Mirror, Meralco is in the testing stage if prepaid electricity would be accepted by consumers. This could be a possibility. Such scheme where users can chose how much to pay for their usage is said to be a hit due to the nature of most income earners. Also such scheme will open business just like what prepaid loading stations for cellular use.

With that it could be possible that MER will surpass its 300 level resistance level.