Ginebra San Miguel (#GSMI) Scores 111% Gain in 2 Months!
Eduardo M. Cojuanco-led Ginebra San Miguel, Inc. (GSMI) has scored an explosive gain of 111% in just 2 months as it spiked from just Php30.00 at the start of May 2019 to a high of Php63.50 in June. The said rise was on the back of a 141% surge in its net income to Php615.93 million in the first quarter of 2019 from only Php255.47 million in the same quarter in 2018. For 2019, Chief Operating Officer Ramon Ang noted that the management actually expects the company’s income to more than double to Php2.50 billion from Php1.05 billion in 2018. At its present price of Php59.90, the stock is therefore just trading at a 2019 PER of 6.73x which is comparatively way lower than the average forward PER of the entire consumer sector of 21.97x. With an expected earnings growth of 138% in 2019, the stock should therefore deserve to trade with a 2019 PER of at least 10x. Theoretically, a PER of 10x for GSMI translates to a target of Php89.00.
From a technical perspective, the stock, as mentioned, has surged to a high of Php63.50 following its breakout from its multi-year resistances at Php30.00 and Php32.90 last May. While the stock has recently pulled back to a low of Php53.05, the stock is still clearly riding along a notable uptrend. Note that should GSMI break above its recent high of Php63.50, then it will be able to drive itself to its next notable resistance at its all-time high of Php75.00 to Php77.00 which is marked way back in 1997. Theoretically, a break past Php77.00 may then send it to its Php89.00 target as per 2019 PER of 10x. Caveat.
GSMI write-up from the Trading Edge Equity Advisor:
April 11, 2019
Ginebra San Miguel, Inc. (GSMI) may soon traverse into the uncharted territory. While the stock is still facing a resistance at Php30.70, a possible break above it later on may not only lead it to revisit its multi-year at Php32.50 but also lead it establish a new bull trend. Note that such break may deliver it to at least Php35.70.
GSMI write-up from the Trading Edge Equity Advisor:
May 6, 2019
In our Equity Advisor issue last April 11, 2019, we noted that Ginebra San Miguel, Inc. (GSMI) was already gearing for an upside break and that a move above its key resistance at Php30.00 would send it to at least Php35.70. As you can see from its chart, the stock has indeed achieved the said initial goal in one swift move following a break above Php30.00. Moving forward, the stock may actually continue to rise given its jump over its 2018 high on heavy volume. Such may then send the stock to an adjusted goal of Php40.00 to Php42.50.
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*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
