List Of 20 Cheap PSE Index Stocks To Build Your Portfolio Around | The Investing Engineer PH

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List Of 20 Cheap PSE Index Stocks To Build Your Portfolio Around

cheap pse index stocks

When stocks go down, investors love it because stocks go on a "SALE". Sale means that the stock is trading below its intrinsic value. In other words, stocks are cheap.

I love to buy stocks when they are cheap and right now, I found a handful of them in the PSEI.

I've listed them below including the assumptions I made.

Assumptions

  • check
    Average 10-yr. return on equity as long-term growth rate projection.
  • check
    Average 10-yr. price to book value (P/BV) as fair value multiple multiplied by the projected book value.

List Of Cheap PSE Index Stocks As Of March 21, 2018

Ticker

Price

P/BV

Fair Value

Target Price

% Upside

% CAGR

SM

₱930.50

2.53

₱958.31

₱1,364.11

46.60%

13.60%

ALI

₱39.75

3.19

₱45.19

₱64.02

61.06%

17.22%

BPI

₱109.20

2.40

₱115.90

₱173..25

58.65%

16.63%

AEV

₱68.05

2.52

₱71.33

₱127.88

87.92%

23.40%

MBT

₱84.15

1.27

₱89.33

₱121.51

44.40%

13.03%

TEL

₱1,470.00

2.69

₱2,366.35

₱5,036.22

242.60%

50.75%

ICT

₱104.70

2.21

₱127.13

₱182.47

74.28%

20.34%

GTCAP

₱1,211.00

1.29

₱1,887.25

₱2,653.58

119.12%

29.89%

MPI

₱5.27

1.04

₱7.15

₱8.98

70.40%

19.44%

LTG

₱18.68

1.41

₱23.92

₱31.72

69.80%

19.30%

AP

₱37.50

2.47

₱44.72

₱87.52

133.37%

32.64%

MEG

₱4.64

1.10

₱4.73

₱6.51

40.29%

11.95%

PGOLD

₱52.60

3.09

₱69.44

₱103.34

96.47%

25.25%

DMC

₱12.60

2.27

₱15.29

₱29.65

135.31%

33.01%

RRHI

₱84.75

2.34

₱121.40

₱168.38

98.68%

25.71%

AGI

₱13.42

0.52

₱36.29

₱52.37

290.22%

57.44%

RLC

₱19.50

1.21

₱25.04

₱34.74

78.18%

21.23%

SCC*

₱29.70

3.77

₱40.69

₱96.29

208.61%

45.59%

PCOR

₱8.75

1.01

₱12.86

₱15.71

79.56%

21.54%

FGEN

₱16.30

0.64

₱23.72

₱30.63

87.90%

23.40%

* Adjusted the book value figure on calculations. From 33.02 (PSE Edge data) it was adjusted to 8.27 (Morningstar data). Thus, intrinsic value calculation changed.

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.
  • However, if you're confident at a particular stock, then you can choose to go all in. Otherwise, stick with diversification w/ proper position sizing.
  • lightbulb-o
    You can always buy index funds if you prefer being a passive investor. Active investing requires skills. So study and practice first.

I bought a few shares of SM today at ₱939.50 and it's already up by 3.07%.

I hope that the market doesn't go up soon so that we can take advantage of the cheapness and accumulate more shares.

Some of the index stocks look overvalued so I omitted them but if the remaining stocks becomes attractive, then I'll probably pick up those I like and buy too.

Happy investing!

Disclaimer: I'll probably accumulate ALI, BPI, AEV and MBT as long as the market remains discounted in the coming months. I'm also interested in SMPH and AC if the market offers a lower price.

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  • Gerard John A. Betonio says:

    Can I ask for your opinion on SCC sir? Having second thoughts on it because it has a very high PBV however it PE and DY are great.

    • Seems like mali yata yung nakalagay sa PSE Edge na book value per share which is 33.02.

      I’ll change it to 8.27 as per latest quarterly report sa Morningstar. May mali sa figures I also checked manually sa financial statements.

      Kaya pala mataas yung intrinsic value. Anyway, I already changed it.

  • Gerard John A. Betonio says:

    Current Valuations and Statements of SCC have not been adjusted for the 300% Stock Divs.

  • Sheryl Yap says:

    This is what I want to learn while i am still here abroad. It will be a good advantage since i still have the resources for investing…I will be following your post…

  • GIRL says:

    Hi, Mark,

    Any thoughts on Double Dragon? Would you buy?

  • Jun says:

    Hi Mark,

    May I know how do you compute your FV estimates?

  • Ryan says:

    Sir Mark, reading your blog and thank you for the insights/ lessons on the stock market investing. More power to you!

    want to ask: What is target price and how do you come up with one?

    • Target price is a price where you are willing to sell the stock. It’s an investor preference and depends on a lot of factors. Some consider the intrinsic value or fair value as their target price. Some use the prevailing sentiment as a basis. It’s really up to you.

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