The 2017 Annual Reports Are Out! List Of Cheap Index Stocks To Buy This 2018! | The Investing Engineer PH

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The 2017 Annual Reports Are Out! List Of Cheap Index Stocks To Buy This 2018!

cheap pse index stocks

Hey there investizen,

In my previous post, I've mentioned some of the the Index stocks worth buying based on my intrinsic value calculation.

I've updated the calculations based on the FY2017 annual reports released last month of April.

The assumptions I used are the same in my previous post, except that the upside is based on targeting the intrinsic value itself, not a specific target price. This is a risk-averse way of investing. If you want an aggressive approach, then you can project the Book Value using a Return on Equity as growth. In my examples, I use the average 10-year ROE; sometimes the median. From there, you can calculate your target prices.

Assumptions on calculating intrinsic value and target price:

  • check
    Use the average 10-yr. Return on Equity (or the median, whichever makes sense) as the long-term growth rate projected three years into the future.
  • check
    Use the average 10-yr. Price to Book Value (P/BV) as a fair value multiple.

I initially thought that posting target prices would be beneficial but I realized that we all have different risk appetites and goals. So I decided to just share my intrinsic value calculations. I believe that this will better serve you so that you can make better investment decisions.

PSE Index Stocks Intrinsic Values (based on FY2017 annual reports)

No​te: Stocks with an upside marked with a GREEN color looks under​​​​​​valued.

Item No.

Ticker

Last Trade Price

% Wt.

Intrinsic Value

% Upside

1

SM

₱947.50

12.98%

₱705.52

-25.54%

2

SMPH

₱33.70

8.03%

₱31.31

-7.11%

3

ALI

₱40.85

8.01%

₱46.82

14.62%

4

BDO

₱132.30

7.35%

₱119.77

-9.47%

5

AC

₱930.00

6.29%

₱888.16

-4.50%

6

BPI

₱102.00

5.55%

₱116.51

14.23%

7

JGS

₱60.60

4.79%

₱58.33

-3.75%

8

AEV

₱67.70

4.54%

₱71.06

4.97%

9

MBT

₱86.00

4.32%

₱86.37

0.43%

10

TEL

₱1,387.00

4.18%

₱2,140.85

54.35%

11

URC

₱139.00

3.82%

₱142.92

2.82%

12

JFC

₱283.00

3.5%

₱240.93

-14.86%

13

SECB

₱207.60

2.95%

₱222.90

7.37%

14

ICT

₱86.95

2.86%

₱126.50

45.49%

15

GTCAP

₱1,000.00

2.7%

₱1,776.62

77.66%

16

MER

₱329.80

2.03%

₱274.07

-16.90%

17

MPI

₱5.20

1.84%

₱7.10

36.59%

18

LTG

₱20.10

1.38%

₱23.58

17.32%

19

AP

₱38.70

1.38%

₱46.26

19.52%

20

MEG

₱4.52

1.34%

₱4.84

7.07%

21

PGOLD

₱47.00

1.26%

₱52.02

10.68%

22

SMC

₱139.80

1.26%

₱75.72

-45.83%

23

DMC

₱10.70

1.23%

₱15.81

47.78%

24

GLO

₱1,525.00

1.19%

₱1,402.83

-8.01%

25

RRHI

₱90.10

1.17%

₱122.13

35.55%

26

AGI

₱13.20

1.11%

₱34.19

159.03%

27

RLC

₱18.30

1.04%

₱25.40

38.82%

28

SCC

₱29.90

0.86%

₱43.54

45.63%

29

PCOR

₱9.28

0.52%

₱13.14

41.62%

30

FGEN

₱15.58

0.52%

₱25.09

61.06%

Intrinsic values are based on FY2017 Reports. Last traded price is as of May 2, 2018.

As always, whether charts or valuations, there's no guarantee of reaching the intrinsic values calculated above. There's also no timeline. It may reach the values today, tomorrow or 10 years from now. The market will always dictate where prices will go. Not you, not me.

Tips on indexing:

  • I strongly advise that you diversify. Don't put all your money in a single stock. For example, if you have ₱200k buying power, then buy ₱10k worth of stocks in each company. Or you can follow the Index weight whichever you prefer.
  • However, if you're confident at a particular stock, then you can choose to go all in. Otherwise, diversify and apply proper position sizing.
  • lightbulb-o
    You can always buy index funds if you prefer being a passive investor. Active investing requires lots of time and skill. To avoid making bad decisions, study and practice first.

It would be best if you compare these intrinsic values to the Fair Value calculations of your brokers. In COL Financial, you can access the investment guide so that you can validate the values.

You can also go to Pinoyinvestor and find the reports corresponding to the stocks mentioned above to validate the values.

If you're not sure what to do, there's always the Truly Rich Club for spoon-feeding guidance on what stocks to buy and when to sell.

The most important thing of all is to dig deeper into each of these companies if you're investing based on your own analysis. Find out the story behind their earnings, debts, cash flow and management. These factors have a huge impact on whether these companies will reach your target prices.

To help you with that, we'll identify the quantitative and qualitative factors of each stock to find out if they are really worth our time. So watch out for my next posts.

Stay tuned.

Happy investing!

Disclosure: I hold SM shares and may initiate a buy on the other stocks I mentioned in this post.

Model Portfolios: Unloved, Value Play, Yield Seeker, Riding the Momentum (July 18, 2018)

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