Stock Picking: Out of Ideas

When I started a year ago, I made a mess out of stock picking. BPI Trade doesn’t allow short selling and ALL stocks hugged the bear. All valuations fell. Foreign investors pulled out. There were 4 stocks holding ground: TEL, PCOR, SMC, and SMCB. I pulled out.

Changes in sentiment and some personal life changing moment got me back to the stock market last March. Every stock was on very low P/E’s.Half the PSE index were selling at 10 below. They were all cheap. It was too bad, I spent all the money I had before.

I tried to catch up and it seems all my picks thus far were satisfactory. It was no surprise. Post the stock market table at the dartboard and just shoot. But now with the valuations “corrected” (I don’t know if this is the correct terminology) I find myself tinkering around Bloomberg and the PSE for days, looking at what could be the next stock in my portfolio. The best bet would be to just choose one of the 30 stocks in the PSE index. I don’t like the PSE index per se particularly because half is dominated by 3 conglomerates and their “tracking/subsidiary” stocks. And most of the stocks in my previous watch/wish list is now expensive with P/E of 15 and above. Although they still pose an attractive price, I would like to stick to the principles that have gotten me thus far.

If asked for three stocks I would consider to buy this week, they would be the following:

1. SLF, Sun Life Financial Inc. – its an insurance company that, as I have discovered, have a lot of “hidden” charges to clients. They sell well but they of course don’t explain their commissions to a prospective client unless asked. I, after being offered a variable life insurance, asked. Amazing, they charge  commisions (a.k.a. loads) on sale and also on redemption while maintaining a monthly charge. They make a lot of money that way. I denied the insurance offer and decided to take an investment position instead.

P/E : 22, its expensive but pre-2008 P/E has reached to 30! It still looks like a bargain to most investors including me.

2. PCOR, Petron Corporation – Ashmore group bailed and the stock is plummeting. The company once topped sales among all the other corporations in the country. But with the next generation hybrid cars threatening its growth, everybody’s selling. It now becomes a bargain opportunity as it is selling at a 6 month new low.

P/E: -11 (Net loss posted last year)

3. ATI, Asian Terminals Inc. – If I were given a crayon and asked to draw how this company makes money, I could draw doodles. I have no idea why I am choosing this stock except for rising earnings, rising dividends, a P/E of 8 and a declining price. P/S and P/B are likewise attractive.

So what’s keeping me from buying? My mood, I guess. I have some reasons to think they are trading at a bargain and I have a part of me wishing the prices could still go down. I hate market timing.

2 thoughts on “Stock Picking: Out of Ideas

  1. your a doctor who dabbles in the stock market hmmm maybe your in the wrong profession ehehe ok lang yan 2008 bumagsak tayo isipin mo na lang di ka gumaya sa akin 2006 lang ako nag start 2 free fall inabot kko ngayon pa lang ako nakabawi ehehe

    • Hahaha. I’m definitely in the right profession. There’s just nobody else dabbling about the Philippine Stock Market. It looks like a closed group of traders with nobody else giving any input. Nagugulat lang ako s mga bargains. Umiiyak sila sa states dahil 3% lang ang highest return nila. Sa atin 8%! Is wall street missing us out?

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