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The Philippines: Solid Fundamentals but Still Expensive

Watch the video with Andrew Stotz or read a summary of the country profile on The Philippines.



Four Pillars of GDP: Private consumption and investments are strong

Overall, The Philippines is experiencing fast GDP growth, which is largely driven by private consumption and investments. Net exports, however, have had a big contracting impact on GDP growth.

Solid fundamentals but expensive

The market’s price momentum has picked up recently relative to Asia-ex Japan, but it remains expensive on a price-to-earnings basis, especially considering the relatively slow EPS growth.

A. Stotz Four Elements: Moderately Attractive

Overall, The Philippines is moderately attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Fundamentally, The Philippines has the third strongest return-on-equity in Asia over the past 12 months.

Valuation: It remains expensive, because PE is high and earnings growth is low.

Momentum: Price momentum has picked up, but earnings momentum has not.

Risk: The market features moderate volatility.

Four sectors returned double digits in the past 3 months

Top 3 largest sectors: Industrials: 26% of the market; Financials: 23%; Real Estate: 18%.

Best sector & stock: Telecom: +13.1% & PLDT Inc.: +15.4%.

Worst sector & stock: Utilities: -4.0% & Aboitiz Power Corp: -8.4%.

 


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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.