How expensive is WEB Fundamentally based on their March 2020 fInancial report?

PhilWeb Corporation (WEB) was originally incorporated on August 20, 1969 as South Seas Oil and Mineral Exploration Co. Inc. to engage in mining and oil exploration. The corporate name was later changed to South Seas Natural Resources, Inc. on March 29, 1984. In 2000, the Company again changed its corporate name to PhilWeb.Com, Inc., together with a change in its primary purpose to that of an Internet company. In 2002, the corporate name was changed to the present one. In 2005, the Company changed its primary purpose to that of application service provider for gaming and internet business activities as one of its secondary purposes.

In 2003, the Company received a license from the Philippine Amusement and Gaming Corporation (PAGCOR) to launch e-Games Stations, which are Internet cafes exclusively dedicated to casino games. With technology provided by WEB, patrons can choose from more than 300 casino games, including baccarat, blackjack, various slot machine games, video poker and sports betting. There are currently 288 operating e-Games cafes across the country, majority of which are owned and operated by independent operators. 

WEB’s subsidiaries include BigGame, Inc.; e-Magine Gaming Corporation; PhilWeb Asia-Pacific Corporation; Major Games and Amusement Corporation; and PhilWeb Mobile Lottery Corp., among others.

As of June 15, 2020, WEB was last traded at 2.36php per share. Its market price dropped by at least 50% from its 52 week high, largely because of the COVID19 pandemic, but is it now fundamentally cheap to buy?

In terms of P/E, WEB recorded a negative trailing P/E of 33.7, meaning, for every 1php earning last 2019, investors of this company are willing or is paying negative 33.7. With a negative P/E and with a negative growth rate (change in EPS) from 2018 to 2019, the company trailing PEG ratio would also be negative, which would be overvalued.

In terms of book value per share, the current market price is currently 11.8 times higher than the book value as recorded in their March 2020 financial report, meaning the company is perceived to be 11.8 times higher compare to the real worth of the company. In terms of this parameter, it’s also overvalued

In terms of income, as per their March 2020 financial statement, they also have a negative income.

Is this a good stock to accumulate fundamentally in this pandemic period? Obviously not, this is a stock being traded technically disregarding the fundamental value. 

Disclaimer: Trade or invest at your own risk.