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Miko's Blog for January 2012

Jan 30, 2012 (11:30 p.m.)

Obviously, the market is now in a correction mode and, one by one, some blues are starting to get hit big time. First, there was PCOR, then, MEG. Today, it was the Lopez group. I have to admit, I did not see that coming in the Lopez charts. In fact, FPH even looked quite bullish to me. I wonder which one is going to be next.

Some basuras though are immune and leading the pack are the JAP stocks and MA. I bet everybody's wondering who that Asiasec buyer is in MA. He obviously knows something we don't. As for the JAP stocks, while everybody was looking at NI, he comes up with a hat trick and hits AGP instead. Sneaky!

Jan 29, 2012 (10:30 p.m.)

Market was down 80 points and I didn't feel a thing. Market was up 68 points and I didn't feel a thing either.

Gatchalian stocks are still at it but, I don't know about you but I would very, very concerned right now if I had either PHES or WIN. Among the Gatchi stocks, FPI and ACE looks a lot safer but I'm not sure how they would react if the PHES/WIN combo started to correct. WPI is caught somewhere in the middle as CLSA continue to hound the bulls in that stock. If we use Westlink as our guide on which Gatchi stocks to buy, I would buy ACE and WPI. Sell FPI and PHES, and, totally avoid WIN.

Could it be that MA is now the main play and LC is now the sidekick? I can't seem to understand how MA was able to sustain its ascent last Friday with F. Yap being a big seller. Either Lolo was also the buyer, the buyer knows that the selling of Lolo is almost done with, or, there is a big buying order for MA, who doesn't care even if Lolo was selling. Everyone seems to be bearish with LC already. Could the majority be right or could this be a prelude to a giant move upwards?

Jan 26, 2012 (11:30 p.m.)

First, there was the Jap party, then, Gatchalian came to party as well. Is Lolo tired of partying? I still believe Lolo can party.

Market was down by as much as 80 points but, somehow, I never felt like it was down that much. I guess, unless you are positioned in the blues, you should have been immune from today's bloodbath.

While I'm not totally surprised by TEL's big drop, I'm a bit puzzled by MEG's sell-off. Is the condo market that bad? Maybe that explains the weakness in SMDC too.

Despite the sell-off in almost all the blue chips today, there is one group of blues that didn't seem to be bothered by it - the Lopez stocks.

Weird disclosures on GMA-7. First, it was GMA-7 that increased its offer, then, it was the MVP group that lowered its bid. What is more peculiar about the disclosure is that, although GMA-7 stated that there were inaccuracies in the news items, they did not say in particular what those inaccuracies were. Obviously, MVP is interested and GMA-7 may be willing to sell, however, whether they will come into a meeting of the minds is another thing altogether. If I add the market caps of both the common and the PDR shares, GMA-7 should be worth at least P33 billion right now. If a deal gets struck at more than P33 billion, a lot of shareholders will be very happy. But if the deal gets struck at less than P33 billion, this will be a DGTL part 2.

Jan 24, 2012 (11:00 p.m.)

Wow! I knew the market was going to go to JAP but I didn't expect it to be a purely JAP day today. Main play is still obviously NI, however, would you still be willing to buy NI at these levels? Second-tier plays are obviously DIZ and ORE while the Third-tier plays are AGP and maybe LIHC. Those who don't want to buy NI anymore are buying the Second and Third-tier stocks, however, the thing is, once NI corrects, I think all the JAP stocks may be dragged down as well. NI, ORE and DIZ are obviously trending up and have been trending up for quite sometime already. You may make money on those stocks but, I think, no jackpots anymore for those stocks in the short-term. If you want to hit the jackpot, you may want to go for AGP or LIHC. The dilemma is, they are not yet in play and, if you buy them now, chances are they might still drop back down and you might get whipsawed in the process. So, do you want to go for the jackpot but sweat it out with JAP, or, do you want to go for the quickie but risk buying at the very top? Oh, by the way, is there still life in GEO?

What a move by GMA-7?!! Something going on in here judging by that move today but let's see how it reacts to its medium-term resistances just up above.

APX - One day wonder once again or the start of much bigger ascent?

I got quite surprised by how strong FDC was today. I know that there are some people who read my blog but never did I expect it to be bidded up to as high as 3.93 today. I sold some of my position today, not because I am bearish on the stock but because I kinda bought too much the other day and I just wanted to decrease the size of my position to my normal position-sizing. By the way, the behavior of FDC these last two days simply confirms that the stock has indeed bottomed-out already at 3.30. Expect some hesitation near its previous highs at 4.20 before it eventually takes that level out in the next couple of weeks, if not days. Hopefully, the Gotianuns realize that they should take advantage of this bull and quicken their fund-raising activities in the market. 

Jan 23, 2012 (11:30 a.m.)

Kung Hei Fat Choy!!!

Didn't make a lot in this current run of the market as I've been so accustomed to this sideways trend of the market, wherein you buy low and you sell high and just take a small amount of profits. To shift one's paradigm from "buy low and sell high" to a buy and hold mentality is quite a struggle. From the way I see it, the market is now trending up again in the long-term with a possible 5500 or even 6000 target in a few months' time but, of course, there will still be corrections along the way.

The big highlights of this run of the market were WIN and NI among the speculative ones, EEI and RLC among the second-line issues and SMPH and ALI among the blue chips. As for the big losers of this run, we have MRC and PCOR.

NI was particularly impressive. I think because of what JAP did to NI, some players might start shifting from Lolo to JAP once again.

I can't read Lolo anymore. I don't know whether it is still a "buy on dips" or is already an "avoid".

One particular stock that caught my eye last Friday was FDC. For the longest time, FDC has been slowly dropping, even reaching to as low as 3.30 just a couple of weeks ago. In the last few days, a big foreign fund posted selling 8 million shares at 3.45. Obviously, this fund has run out of patience with the stock and just wanted to get out at all costs. In my opinion, that may be the last time that you'll be able to buy a big position in FDC at such low levels. The stock is trading at just 8.5x P/E while the average P/E of conglomerates right now is 12x. Book value per share is P7.20, thus, is currently trading at just half its book value. Cash on hand alone is already equivalent to P2.17 per share, if my computations are correct. 52-week high of the stock is P5.15. Technically, the stock appears to have already bottomed-out at 3.30. 4.20 coming? Possible catalysts for the stock are developments in its power generation business, the EastWest bank IPO or its own follow-on offering. The only negative for the stock is its liquidity, which, according to the PSE, has a free float level of just 7.3%. Disclosure: I was a big buyer of this stock last Friday.

Jan 19, 2012 (12:30 a.m.)

I feel pity for all those who have PCOR shares. Not much one can do though with that decision by the retirement fund. It does seem odd to me though that they had to publish it. Why not just discreetly sell it to somebody and just do a block on the board like everyone else? Obviously, the fund has already begun selling the shares in the market today with the whole world now buying PCOR. The thing is, with everybody being able to buy at low levels, who's going to buy higher?

Congratulations to Mr. Bennett on WIN! WIN was a winner after all. Rumor has it that T+3 will be on for all Gatchi stocks by Chinese New Year.

And I thought Mr. Bennett was the biggest Tsupitero in the market. Anyone noticed Wealth in MA? Made 2 to 3 flucs in three days, 1 billion shares each on the A and B shares. Unbelievable!

Is LC dead? That depends if everyone still wants to buy it or not. Everyone is looking at the "cup and handle" but...

Aside from the big caps like TEL, no other safe haven now except in JAP's NI?

Market made a new all time-high today but I certainly didn't feel it at all. If you looked at the stats closely, there were actually more decliners than advancers. Could this be a warning sign that the market is now near a peak? Somehow, I'm just not buying the bull market scenario that everyone is talking about. Or, maybe that's the reason why the market's continuing to go higher? Don't ask me, I'm lost as well.

Jan 16, 2012 (10:30 p.m.)

Could Friday the 13th have marked the peak of the markets?

In the meantime, while everybody is looking at LC, Lolo does the unexpected and hit MA instead. Why push a very heavy P80 billion company when you can push a much lighter P14 billion company with much less effort. With the way MA behaved today, Lolo has definitely something up his sleeves. Time to sell LC and Buy MA?

I know construction firms are generally bullish but I think buyers of EEI at these levels are no longer thinking straight.

Jan 12, 2012 (10:00 a.m.)

Do you know that foreign funds bought a lot more in this first two weeks of January than the whole of 2011? I wonder what they'd do if they saw 46.00 to a dollar.

You know that the market is high already right now because the most laggard sector in the whole market is now the strongest - property sector. And you know that the property sector is quite high already because the most pathetic stock in the property sector is now the strongest - ELI.

By the way, the 0.54 cents difference between LC and LCB occurred last March 1997. That was when LC was trading at its highs near 1.00 after rallying from 0.15 cents a couple of months back. Could the wide difference in the price of LC and LCB be foretelling that prices are now near its peak?

Yeah, I'm not exactly a bull anymore right now.

Jan 12, 2012 (7:00 a.m.)

Market up 84?!! Wow! How come I hardly felt it?

Could Chucky be done with his selling in MRC?

Some people might think that Venture is going crazy buying up AAA but what most people isn't realizing is that Alakor may be Venture as well. Sneaky!

I wonder if the Macquarie in ORE is the same Macquarie in AT.

WIN is a loser.

The difference now between LC and LCB is 0.29 cents. Something's got to give. Either LC will catch up with LCB or the other way around. Here's a bit of trivia - the highest price difference between LC and LCB since 1985 was 0.54 cents.

Jan 11, 2012 (12:00 a.m.)

The big story of the day was the resurrection of CYBR. Could this finally be it for CYBR or is this one of those one-day wonder once again? Asiasec certainly seems to think that there is something there in CYBR. Isn't that one of RSA's brokers?

Did JAP's NI and DIZ peak today? Only JAP knows.

Chucky is doing his thing again with MRC. I wonder how much are the cost of those shares? Obviously, it's below 0.30 because he is more than willing to cash in even at 0.265.

Jan 10, 2012 (12:00 a.m.)

So far, so good for the PSE. As of this first one week of 2012, we are probably one of the strongest markets in the world. Of all the markets that I am following, we are the only market that is just a stone-throw away from trading at a new all-time high. I have no idea why that is so but no complaints, of course.

LC testing previous highs again. Will it break it? I think it will but divergences in the weeklies are making me nervous.

The very controversial WIN, along with its sister, PHES, were the weakest stocks in the whole market. I guess that's what often comes next after being in a euphoric state.

Some people are going for the "sure thing" by buying DGTL, which they can exchange for TEL at 2500. The thing is, will TEL still be trading at 2700 once the shares, which were exchanged for DGTL, become saleable? I really doubt it.

Did I just see Chucky selling MRC once again?

Jan 7, 2012 (5:00 p.m.)

I'm having quite an adjustment in my lifestyle because of this whole trading. I finish writing my newsletter around 8 or 9 o'clock in the evening. After doing it, I'm just totally drained. That's the reason why I haven't been writing here in my blog recently.

I got a lot of negative feedback from some people in FinanceManila after writing my blog last Monday and saying some bearish comments about WIN. What can I say? Here's the inherent problem with talking about stocks that have gone up already - most of them are bearish and most of them are a "sell". In this current sideways environment of the market, the best times to buy is when no one notices it and the best times to sell is when everybody is looking at it. When WIN hit almost the ceiling price last Monday, everybody was definitely noticing it. So, do I now start talking about stocks that are doing nothing from this point on so that I could say something bullish about the market? People will just laugh at me if I say for example that SLI right now is a strong buy. Of course, for those in the know, they know that that is the truth.

Jan 4, 2012 (10:30 p.m.)

Short-term breakout is confirmed! Will the market be at a new all-time high by the Chinese New Year? The foreign funds seems to think so as they were net buyers today by almost P1 billion.

After being in the doldrums for quite some time, the Oil sector seems to be in play right now. I guess buy OV/OPM, sell CEB/PAL? But PAL doesn't look bearish to me at all.

JAP stocks too are on the move. He seems to be having fun with his NI. I wonder who's going to win this round in AGP? It's JAP vs. Chucky in AGP.

Lolo, on the other hand, is now in cruising mode.

AC was fantastic, along with GLO and UBP. Parabolic spikes for those three issues.

A lot of sectors are starting to breakout from their ranges - Oils, Banks and some 3rd line issues. The only weak sector is still the property sector.

I bet a lot of people are being left out of this move as the market has already conditioned people to buy low and sell high. If you did this, you probably have sold too early and are now waiting for a correction to buy. The thing is, if the market is really trending up now, it will not give you an easy opportunity to buy low.

By the way, the Tsupitero Newsletter is now just a P1,000.00 per month. Email me at miko@tsupitero.com if you are interested to subscribe.

Jan 3, 2012 (9:00 p.m.)

Is the market breaking out of its range or is this a trap? Tough call really.

After trending down for three weeks, Lolo has finally awaken!

Peso-Dollar, make or break now! Watch 44.50 down or 43.50 up.

By the way, the Tsupitero Newsletter is now just a P1,000.00 per month. Email me at miko@tsupitero.com if you are interested to subscribe.

Jan 3, 2012 (9:00 a.m.)

The market still looks strong but it may be deceiving with value turnover yesterday at just P1.7 billion. We probably won't see the real picture until all the players start coming back from their vacations, which is in about 2 to 3 days. Typically though, market is still strong until around the 2nd week of January, that is, if we follow the seasonal patterns.

The big story of the day though are the Gatchalian stocks, primarily WIN and PHES as rumors continue to go around that they are still in talks win the Ayalas. Both stocks almost closed at the ceiling price. The thing is, the Ayalas already denied that they are in talks. And, even if they were, what's in it for Gatchalian? Could the deal justify the current valuation of WIN or PHES? From the way I see it, prices are now getting way ahead of its fundamentals. Besides, isn't Westlink, whom I see selling, Gatchalian?

DMC is the stand-out among the blues but why? DMC must have a very, very good reason for leading the whole market up, otherwise, it is trading way out of line with the rest of the big caps.

Notice that all the construction groups (cement industry included) are strong. I guess the market is speculating that these companies will bag deals on the government's PPP project.

IP has secured a deal with GEM fund? I don't think I ever remember a single instance wherein the stock didn't end up at the lows once GEM fund comes into the picture.

Keep a very close eye on the Dollar!!!