Kung Hei Fat Choi this Year of the OX!
Scanning the Philippine stock charts this Monday morning, my scans showed only one stock for a possible new buy position. With the global stock markets in a bear market currently, the Philippine market can at best follow the leaders right now. My stock pick for this week is a real estate development company in which Shoemart Inc and Henry Sy are the two largest shareholders. I recommend to always use stop-loss in case the position goes against you and keep your loss as small as possible, especially in these current market conditions.
Buy Long SM Development. Ticker SMDC
Buy Entry: 2.16 to 2.20
Stop-Loss: 2.15
Take Profit Areas:
2.32 to 2.34
2.43 to 2.45
2.62 to 2.65
Technically, SMDC is showing a completion of its 4th wave heading up into a finishing 5th wave. This is a somewhat erratic chart formation as caused by lack of trading volume and or liquidity in the stock. Nonetheless, chart patterns like this can provide low-risk high-reward returns. To be on the safe side and lock in any amount of profit given by this stock, if and when SMDC breaks out above 2.30 I would be looking to sell. Longer term is another story, one that I would listen to once I was back in cash.
Fundamentally, SMDC should benefit from the global financial crisis and attract more foreign investors as well as local investors too. Smart money is always looking for a place of good return, and Philippine real estate right now may be one of the very few places to get a decent return on investment in the long term. With the Philippine banks being healthy by not being exposed to the financial mess in the west and strong buying demand from Asia and the Middle East currently, this would lend to providing a strong foundation for the Philippine real estate sector to benefit. All in all, Philippine real estate shows little to no downside right now, with stable returns long-term.
SM Development Company Profile
SM Development Corporation (SMDC) was originally incorporated on July 12, 1974 as Ayala Fund, Inc., a closed-end investment company. In March 1986, it was renamed SM Fund, Inc. after the SM Group of Companies took majority ownership of the company. Since then, SM Fund, Inc. remained as an investment company providing investors with a professionally managed vehicle to invest in diversified businesses in the country. In May 1996, SM Fund, Inc. was renamed SM Development Corporation to reflect its new business thrust of property development, whose primary objective is to pursue opportunities in the real estate industry. In line with this, its business proposition was initially directed toward tapping the residential property market near/beside SM shopping malls. The business of securities investment was also retained to provide a regular flow of earnings in the form of interest and dividend income.
SMDC's projects include Lindenwood Resources, Berkeley Residences, and Grass Residences, among others. The company has also accumulated significant land bank within the areas near Metro Manila that could be utilized into residential developments to serve the growing demand for affordable housing. SMDC's subsidiary, SM Synergy Properties Holdings Corporation, handles the development of Chateau Elysee, a mid-rise residential condominium in Paranaque City, and the Mezza Residences in Quezon City.
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Click the SM Development Stock Chart below for a larger view.
