MER Key Fundamental and Technical Indicator as Mar 02, 2021

Latest news today is that their net core income drop by 9%. I see that technically, the trend seems to be in bearish mode. 

See more on the video;

DITO key Fundamental and Technical Indicator as of March 01, 2021

 

Is GTCAP fundamentally and technically sound to buy based on their March 2020 financial report and current price?

GT Capital Holdings, Inc. (GTCAP) was incorporated on July 26, 2007 as a holding company. GTCAP is the primary vehicle for the holding and management of the diversified business interests of the Ty family in the Philippines. The Company holds interests in banking; automotive assembly, importation, distribution, and financing; property development; life and non-life insurance; and infrastructure and utilities. 

GTCAP's subsidiaries are Federal Land, Inc.; Toyota Motor Philippines Corporation; Toyota Manila Bay Corp.; and GT Capital Auto Dealership Holdings, Inc. The Company also has significant shareholdings in Metropolitan Bank & Trust Company; Metro Pacific Investments Corporation; Philippine AXA Life Insurance Corporation; Toyota Financial Services Philippines Corporation; and Sumisho Motor Finance Corporation.

As of July 23, 2020, GTCAP was last traded at 438php per share, down by 55% compared to their 52-week high price. What valuation can we get from their March 2020 quarterly report?

Trailing P/E: 438/91.6= 4.8 Indicating that for every 1php income last 2019, investors are willing to pay or are paying 4.8php only. It is said that an overvalued company would be the one trading at a rate that’s 50 times earnings, or this could be a gauge on how optimistic are investors on this company. A lower P/E may imply low in optimism perhaps due to lower expectations on future earning, or news i.e pandemic that greatly impacts investor optimism. 

For a growth rate of 56.9% change in EPS from 2018 to 2019, the PEG ratio would be 4.8/56.9=0.08 meaning, investors are paying 4.8php per earning relative to the growth rate of 56.9% from 2018 to 2019. A PEG ratio of less than 1 is usually considered undervalued.

Price to Book Value per share (P/B) = 438/760.14= 0.57, meaning, the current market price per share is 42.4% lower compared to the real worth of the company as based on their March 2020 financial report. A P/B of less than 3 is potentially undervalued

However, due to pandemic, their first 3 months net income dropped by 25.7%

Still, fundamentally, based on the parameters above, this share seems to be a good buy to accumulate.

However technically, the MACD seems to indicate bearish momentum. RSI also continues to move to an oversold level, it may be a good strategy to buy this stock while in a bearish mode as this will definitely bounce back. Caveat