December 17, 2013 9:39 pm
DUE DILIGENCER
Emeterio Sd. Perez
MANILA Electric Co. (Meralco) hit a high of P315.20 on November 7 but plunged to P250 on December 13. To investors who had bought at high and are still holding them, this meant a paper loss of P65.20, or 20.685 percent.
When to unload is a big question mark at this time when the market is down. Nobody knows for sure when recovery would occur. But the public, who trade on listed shares, know what to do: Either they wait for a good market or sell them to cut losses.
A few, however, would take advantage of Meralco’s fall, which to them would only be temporary.
For instance, on Decemebr 11, when Meralco climbed to session’s high of P260 and fell to a low of P255.40, Ray Espinosa, a member of the board and general counsel, bought 10,000 shares at P256.80 each. The acquisition increased the number of Meralco shares he owns to 21,000. The following day, the stock closed at P253 but slightly recovered on Monday when it ended the session at P256.40, still putting him slightly behind. If he has not sold yet, then being an insider, he is probably more optimistic than the rest of the public who are outsiders because he has faith in Meralco.
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What hit Meralco that would drag its share prices down? Was it the government’s move to investigate the recent of P4.15 rate increase per kilowatt-hour which has been approved by the Energy Regulatory Commission?
Whatever it was that dragged down Meralco’s market price, the public investors would not care as long as the company’s financials look good that would enable Meralco to pile up retained earnings declarable as dividends either in cash or in stock.
In its financial filing covering the first nine months, Meralco reported unappropriated retained earnings of P42.631 billion after distributing total dividends of P9.129 billion, or P10.10 a share, and P11.496 billion, or P8.10 a share, in 2013 and 2012. The company declared these dividends in two tranches—one in February and one in July. Does this mean a dividend is forthcoming early next year?
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Puregold Club Inc., a retail store chain controlled by businessman Lucio Co., has been doing well.
In the first six months of the year, Puregold, which is listed on the Philippine Stock Exchange, reported revenues that surged 29.327 percent to P51.608 billion from January to September this year from P39.211 billion in the same period last year.
But what is more impressive is Puregold’s profitability as it net income in the first nine months soared 46.544 percent to P2.641 billion from P1.802 billion in the same period in 2012. This year’s profit translates to earnings per share of P0.95, up from P0.77.
Puregold already has piled up retained earnings of P6.549 billion as of September 30, 2013, after distributing cash dividend of P0.20 a share in February. On Monday, the company’s board approved a P0.30 dividend payable on January 30, 2014.
Insiders’ trades. On December 13 when Aboitiz Power Corp. climbed to a high of P32.85, dropped to low of P31.75 and closed at P32.25, Aboitiz Equity Ventures Inc. bought 3.767 million shares in Aboitiz Power Corp. at P31.70 each. The acquisition increased the number of APC shares it owns to 5.656 billion, or 76.88 percent.
On November 26, when JG Summit Holdings Inc. opened at P40 and closed at P38.85, businessman John Gokongwei Jr., a member of the board, sold 44.973 million shares at P40 each. The sale reduced his holdings in the family controlled holding company to 962.567 million shares.
Alexander Asuncion, president and a member of the board of IRC Properties Inc., grossed P11.23 million from the sale of 8 million shares in five trades—1 million shares at P1.37 on December 6; 2 million shares each on December 6 and 9 at P1.4 per share; and 3 million shares at P1.42 each on December 11. IRC closed at P1.37 on December 12, a day after Asuncion completed the sale. source
esdperez@gmal.com
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