Know Your Stocks - How Expensive is MEG fundamentally based from their Dec 2016 Annual Report?

Megaworld Corporation was incorporated on August 24, 1989 to engage in the development of large scale, mixed-used planned communities or townships that integrate residential, commercial, leisure and entertainment components. The Company is also engaged in other property-related activities such as project design, construction oversight and property management. On August 19, 1999, the Company changed its corporate name to the present one to coincide with its conversion from a purely real estate company into a holding company, although MEG continues to focus on its core competence in real estate development.

MEG's real estate portfolio includes residential condominium units, subdivision lots and townhouses, condominium-hotel projects as well as office projects and retail spaces. Since its incorporation in 1989, the Company and its subsidiaries and associates have launched approximately 371 residential buildings, office buildings and hotels consisting in aggregate of more than 6,786,146 square meters of floor area.

As of December 31, 2015, the Company's subsidiaries and associates include Empire East Land Holdings, Inc.; Global-Estate Resorts, Inc.; Suntrust Properties, Inc.; Paseo Center Building Administration, Inc.; Richmonde Hotel Group International Limited; Bonifacio West Development Corporation; Suntrust Home Developers, Inc.; and Palm Tree Holdings & Development Corporation.

As of April 27, 2017, MEG was last traded price at PHP 4.06, this is just 1.03 times higher compare to their recorded book last December 2016, not expensive yet for most value investor since a PBV of more than 3 is considered expensive.

In terms of P/E, the company recorded a trailing P/E of 11.60 meaning, for every 1PHP earning last 2016, investors of this company are willing or is paying 11.60Php. With an 11.60 P/E and with growth rate of 12.90% from 2015 to 2016, the company trailing PEG ratio would be 0.90 which means, investors of this company are paying 11.90Php for every 1Php income last 2016 for a 12.90% growth rate from 2015 to 2016. A fair valued stock usually has PEG ratio of 1 meaning, what you are paying for that earning- the P/E is equivalent to the growth rate- increase in EPS.

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