AEV

[Jclever]

Half sold at 48. Might move higher tom? Crossfingers

[Mr. Banker]

Mr. Banker, whats your TP for AEV in the short term?

Supported by a +28.2% improvement in 1stQ12 earnings and current strong market, am hoping that this will touch 50 in its current run. Will not hesitate to unload, however, if market starts to exhibit weakness.

[Mr. Banker]

After a month's hiatus, am looking forward to completing another round with AEV. Anticipating a good 2nd qtr report with better than consensus yields from AP and UBP.

[BASURERO]

ABOITIZ EQUITY VENTURES, INC. – AEV

CURRENT PRICE = PhP 48.50


P/E RATIO TEST:

2009 Earnings-per-share = 1.494
2010 Earnings-per-share = 3.9600
2011 Earnings-per-share = 3.8380
2012 1H Earnings-per-share = 2.1390

Average earnings-per-share (based on the past 3 years and 2 quarters) = 3.3925
Average price earnings ratio (based on the past 3 years and 2 quarters) = 14.30

Benjamin Graham recommends current price no more than 15 times average earnings over the past three years.
This company has low price earnings ratio.
This issue passed Graham’s price-earnings ratio test.


PRICE-TO-BOOK RATIO TEST:

Total Equity = PhP 97,169,966,000
Outstanding Shares = 5,521,871,821
Book-Value per Share = PhP 17.60
Price-to-Book ratio (PB) = 2.76

Graham recommends that current price should not be more than 1.5 times the book value last reported.
This company has high price-to-book ratio.
This issue failed Graham’s price-to-book ratio test.


NET-WORKING-CAPITAL OR “RARE BARGAIN” TEST:

Current Asset = PhP 60,452,116,000
Total Liabilities = PhP 108,848,292,000
Net Working Capital = PhP (48,396,176,000)
Current Asset to Total Liabilities ratio = 0.56

* By “net-working-capital”, Graham means current assets (such as cash, marketable securities, and inventories) minus total liabilities (including preferred stock and long-term debt).

Total liabilities is greater than the current asset.
Graham recommends issues with positive net-working-capital.
This issue failed Graham’s net-working-capital or “RARE BARGAIN” test.


GRAHAM’S “BLENDED MULTIPLIER” TEST:

P/E = 14.30
P/B = 2.76
P/E*P/B = 39.40

Stock is overvalued.
Graham suggests that the product of P/E and P/B should not exceed 22.5.
This issue failed Graham’s “blended multiplier” test.


LIMITATION OF THE ANALYSIS:

Analysis does not include earnings stability, dividend records, earnings growth and futures earnings (or forward P/E ratio).


REFERENCE:
http://www.pse.com.ph/resource/corpt/20 ... un2012.pdf
http://www.pse.com.ph/resource/corpt/20 ... ec2011.pdf

[Tsupit King]

i wonder what will happen if you apply Graham's test on Apple and Google stock prices. Must be coming out 1,000 times overpriced. Need to consider growth potential in a strong economy environment. this is the reason we are in a bull-market.

[tatandarin]

What is the implication of AEV buying up UBP and AP shares?

[Mr. Banker]

What is the implication of AEV buying up UBP and AP shares?

My view, friend tatandarin, is that it depends on the intention or motivation as well as magnitude of the purchase.

If it is of significant size and the intention is to keep the shares, the obvious consequence is that it increases AEV's ownership and reduces the shares available in the market.

But if we expand our thoughts further, one of the usual reasons for buying one's own shares or that of one's subsidiaries is when owners feel that the current price of the shares are lower than what it should be either now or in the immediate future.

[tatandarin]

Thank you Mr. Banker. Does it mean it is better to buy UBP shares instead of AEV?

[ahock]

tagal na din nito conslidate noh.... ano ba resistance nito 50?

[journeyman2]

May volume. Who is buying?

[Mr. Banker]

Thank you Mr. Banker. Does it mean it is better to buy UBP shares instead of AEV?

Ayyayay...I have some difficulty answering your question, friend tatandarin, as it suggests a one-time entry now. It is different from what I am used to which is to accumulate stocks at their lows in tranches.

If one is to come in just now, the key is assessing which one can give the best reward over your desired holding period.

If you use my target selling zone of 52-55 for AEV, I don’t know if that is already an acceptable reward for you at current price. I can sell it at that price cause I accumulated it over time at a low AEP of 47 or thereabouts. Its relatively reasonable dividend pay-out of P1.58 (usually declared March) can provide holding return just in case current favorable market sentiment reverses.

UBP might be a better deal for you. UBP is a core stock of mind that I too have accumulated with AEP of 99.50 thereabouts. I have the mindset to hold the same as a core stock as its current price is far from what I believe as rational price of 124. As other banking stocks have already made significant price climbs, UBP might already be next in the rotation. I thus think it has better chances of giving you a reasonable return over a shorter time than AEV. Like its parent company, it too has a good dividend payout of P3.00/share similarly declared early March.

[mcgradyfan]

AEV DAILY 10-8-12

Candles getting smaller and smaller as it reaches the apex of this 3 month triangle. What does it mean? Either nobody is willing to sell it lower, or buyers happily eating all the shares, preventing it from falling.
PAPA Sec is providing all the selling at 49.00. This firm needs to be taken out.
Consistent buying by Credit Suisse, and consistent NFB in the past 2 weeks.
TP of 52. Lets see if it will breakout.

[tatandarin]

man... is this break down or an opportunity to add up? which is which?