Technical Update On JGS
In our previous post (kindly see it HERE or below) we mentioned that JG Summit Holdings, Inc. (JGS) would aim for at least Php40.00 following a breakout from a symmetrical triangle. A breakout occurred last November 19, 2012 and in just 5 weeks, it indeed reached for the said minimum target. Since then it has been having trouble moving and closing above Php40.00. Given the selling pressure at this level and the potential consolidation or correction of the market in general in the near term, JGS could likewise be stalled. Some kind of sideways movement, perhaps between Php40.00 and Php38.00 may happen. It may even fall to as low as Php36.00. Nonetheless, any dips here and there should be a good opportunity to go long on the stock. At Php40.00, JGS’ P/E is pegged at only 11.90x which is still cheaper than the conglomerate average of around 15x.
Previous Post Dated Nov. 19, 2012 (See HERE)
JG Summit Holdings Inc or JGS has been on snooze mode for a little more than 6 months now. As you can see from its chart, JGS has consolidated within a symmetrical triangle after it sped up to a high of Php36.20 from the P20 levels during the second quarter. Note also that it has respected its uptrend a couple of times before. So as it approaches this uptrend line again, a bounce off from may occur. Anyhow, there remains to be a bias for an upside breakout since the symmetrical triangle that we are seeing can be found in an uptrend. In the event of a breakout, a move above the Php35.00 level, the Php40.00 marker (gauged by projecting the height of the pattern from the point of potential breakout) may be reached.
On the fundamental side, JGS reported a 37% y/y jump in its net profits for the first 9-months of the year. For the period, JGS posted a P10.76 billion earnings versus P7.88 billion in the last year. The increase in profit can be attributed to the P2.95 billion cash dividends that it received from PLDT. Note that JGS and PLDT made a share swap deal for JGS’ Digital Telecommunications Philippines Inc (DGTL)- brand name Sun Cellular early this year. Given this, JGS already achieved its full year profit forecast. Hence, an upgrade in its profit target for the year will most likely happen soon. The average target price for the stock, by the way, stands at Php41.00/sh. An upward revision in its profit target for the year of course may boost its target price higher as well.
