Know Your Stocks - How Expensive is MEG fundamentally based on their June 2017 Quarterly 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. The Company has three primary business segments: real estate sales of residential developments; leasing of office space, primarily to BPO enterprises, and retail space; and management of hotel operations.

Since its incorporation in 1989, the Company and its subsidiaries and associates have launched approximately 560 residential buildings, office buildings and hotels consisting in aggregate of more than 12 million square meters of floor area.

As of December 31, 2016, the Company's subsidiaries and associates include Empire East Land Holdings, Inc.; Global-Estate Resorts, Inc.; Suntrust Properties, Inc.; Richmonde Hotel Group International Limited; Bonifacio West Development Corporation; Suntrust Home Developers, Inc.; Maple Grove Land, Inc.; San Vivente Coast, Inc.; and Palm Tree Holdings & Development Corporation.

As of Sept 11, 2017, MEG was last traded price at 5.30Php, this is 1.29 times higher compared to their recorded book value as of June 2017 quarterly report. In regard to this parameter, a higher market price in comparison to company's net worth could mean the share is over valued but, it could also mean that the investors perceived the company to be worth more than its net worth due to its potential earning.

In terms of P/E, the company recorded a trailing P/E of 15.14 meaning, for every 1PHP earning last 2016, investors of this company are willing or is paying 15.14Php. With the P/E value and with growth rate of 12.90% from 2015 to 2016, the company trailing PEG ratio would be 1.17 which is more than 1.0 meaning, investors of this company are paying 15.14Php for every 1PHP income last 2016 even if the company grows a bit less than the P/E or 12.90% 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.

In terms of income, the first 6 months net income attributable to parents increased by 10.8% in comparison to last year first 6 months net income

Disclaimer: Trade or invest at your own risk.

Like and Share