#Semirara Mining and Power Corp analysis | Explore Tumblr Posts and Blogs

inajanzel · 3 years

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Hello, buddies! Welcome to my blog! I am Ina and here’s my Investa journey.

Before choosing what stocks to buy, I conducted my research first regarding how the stock market works and what are the things that a beginner must remember and do before buying stocks.

Here are the steps that I did before coming up with the stocks that I bought:

1. I IDENTIFIED MY GOAL, TIME HORIZON, AND RISK-APPETITE

Goal: I want to invest because I have these long-term goals that I want to achieve. With the use of time, proper knowledge, and discipline to invest, the goal of being financially independent wouldn’t be that hard to achieve.

Time Horizon: I decided that the period that I will be holding my investment is for the long run that’s why I decided to buy blue-chip stocks since these stocks are for long-term investments.

Risk Appetite: Given that I am a conservative investor, I cannot be an active trader who can handle the day-to-day or week-to-week fluctuations of the price in the stock market, buying blue-chip stocks which are known for their stability and slow, steady growth is the best option for me. I want to diversify my portfolio by buying a stock that’s both defensive and growth. I want to venture on a stock that’s able to withstand dips in the economy and at the same time, although I’ll have little to no dividends that will be received this year if I buy that stock, I know that it’s still expanding and it will increase its price years from now, thus, I’ll have an increase in earnings. Given that my goal is long-term, I thought that these types of stock will be suitable and perfect for me.

2. I INVESTED MY TIME IN LEARNING

Upon reading articles regarding what stocks to buy and what to do when you are already trading or investing, I learned that relying on the opinions of others is a big NO.

I must do my own research because this is my money that’s at stake. It’s my responsibility to know the right strategy, methodologies, setup for me to properly do investing.

I often interchange the words trader and investor before as it’s often used when we talk about the stock market. Upon proper research, I learned that I can be an investor but not a trader in my current state. A trader is someone who’s willing to participate in the market fluctuation through a day-to-day basis or even hourly basis trading depending on his/her strategy. Given that I still can’t come up with my strategy and system on how to properly approach the stock market since I really have to do proper research and pour my time into that, I decided that with the output given, I can be an investor but not a trader.

3. THE STOCKS THAT I BOUGHT

• DMCI Holdings, Inc. (DMC)

• Semirara Mining and Power Corporation (SCC)

• SM Investments Corporation (SM)

• Manila Electric Company (MER)

• DITO CME Holdings Corp. (DITO)

Reason: Stocks from DMC to MER are blue-chip stocks, since I am a conservative investor, I want to invest in companies that are well-established because this will serve as a safe investment avenue for me. This assures me of earning steady but guaranteed returns. Also, the risks factor associated with these companies are comparatively less since they’re all blue-chip, not to mention, these 4 companies belong to the top 30 blue-chip stocks in the country.

Also, I checked their dividend yield every year and I found out that they give reasonable and high payouts to their investors. With the range of 5%-10% dividend yield every year, not bad, for a conservative investor like me. For DITO, I took the risk because I believe that since they are still new, their financials would grow in time.

4. STOCK ANALYSIS

DMC

Below Fair Value: PHP6.26, is trading below estimate of fair value (PHP6.28)

PE vs. Market: good value based on its PE Ratio (8.5x) compared to the PH market (15.9x)

Growing Profit Margin: current net profit margins (12.3%) are higher than last year (10.2%)

Short-term Liabilities: short-term assets (PHP117.0B) exceed its short-term liabilities (PHP59.1B)

Long Term Liabilities: short-term assets (PHP117.0B) exceed its long-term liabilities (PHP54.3B)

SCC

Volatility Over Time: weekly volatility (4%) has been stable over the past year

Below Fair Value: (PHP14.28) trading below estimate of fair value (PHP36.47)

Short-term Liabilities: short-term assets (PHP24.2B) exceed its short-term liabilities (PHP20.5B)

Long Term Liabilities: short-term assets (PHP24.2B) exceed its long-term liabilities (PHP12.0B)

Debt Coverage: debt is well covered by operating cash flow (53.6%)

Volatility Over Time: weekly volatility (4%) has been stable over the past year

Return vs Industry: exceeded the PH Industrials industry which returned 4.5% over the past year

Earnings vs Savings Rate: forecast earnings growth (29% per year) is above the savings rate (4.9%)

High Growth Earnings: earnings are expected to grow significantly over the next 3 years

Earnings Trend: earnings have grown by 0.7% per year over the past 5 years

MER

Volatility Over Time: weekly volatility (2%) has been stable over the past year

PE vs Market: good value based on its PE Ratio (15.8x) compared to the PH market (15.9x)

Debt Coverage: debt is well covered by operating cash flow (28.6%)

High Dividend: dividend (4.6%) is in the top 25% of dividend payers in the PH market (4.2%)

Growing Dividend: dividend payments have increased over the past 10 years

DITO

Short-term Liabilities: short-term assets (PHP4.1B) exceed its short-term liabilities (PHP32.8M)

Long Term Liabilities: has no long-term liabilities

Debt Level: debt free

Reducing Debt: had no debt 5 years ago

Interest Coverage: has no debt, therefore coverage of interest payments is not a concern

5. STOCK INVESTMENT STRATEGIES

My stock investment is for a storehouse of value, my source of income, for accumulation of capital and I’ll utilize buy-and-hold as my main strategy. I didn’t venture into having aggressive stock management and short-term trading as my strategy because I’m not a risk-taker. I want to hold my stocks for the safety of my investment, the stocks that I also chose have a dependable flow of dividends so I can use them as a source of income. The growth of my investment is also a goal for me so I bought a growth-oriented stock which is DITO. Lastly, the strategy of buying and holding is what I used, I have a goal that if ever I’ll receive a 15% profit from the stock that I bought, I’ll sell my stock.

In my investing journey in Investagram, the highest profit that I received is 10.37% from SCC, next to it is DMC’s profit of 6.78% which gave out Php 1, 686.98. I held unto these stocks because I thought that their profit will go higher and if it reaches 15%, then, that’s the time that I’ll sell them. Sadly, that’s the highest that they’ve reached in my journey. I didn’t sell my stocks because they didn’t reach the target profit that I want to accumulate.

6. RESULT

Do you want to know my rank and result in my Investa journey? Well, it was July 1st when I saw that I ranked 2nd from my previous 31st rank. On the next day, I ranked 1st and it lasted for two weeks. Thanks to my 4 blue-chip stocks which gave me a high profit, I was able to sustain my rank for 2 weeks despite having a continuous loss on my DITO stock. It was July 15 when I saw that I fell on the 12th spot and sadly, on July 19, I fell on the 33rd rank and I wasn’t able to recover from that. On the last day of my Investa journey, I am 32nd in rank. If you’re going to ask me what happened, my loss on DITO kept on getting higher and higher each day. I reached an approximate of Php 5,000 loss on the last day of my journey, I found out in myself that because of the risk that I took in buying a stock that’s not a blue-chip, I had a great amount of loss that I don’t know if I’ll still recover. I saw in myself that I am still not ready to be a great risk-taker because honestly, I felt sad after seeing my stock in DITO getting a high loss every single day. My assessment in myself for now since I still lack knowledge and experience when it comes to the stock market is to learn more everyday about the Fundamental and Technical analysis since these two are vital and used when we are investing and to train myself slowly how to not be super conservative if I want to gain high in the stock market.

That’s it for my Investa journey, I hope you gained something from my experience and hopefully, you can use them if you want to venture into the world of the stock market!

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