Phisix sinks 4.26% again

It's Valentine's at Philippine Stock Exchange. You don't need to look at individual stocks. Looking from afar, you will immediately see the red numbers, indicating that stocks are down.

Applying the contrarian principle again, we see that most stocks are worth a second look now. Take the case of Megaworld. It closed at 1.50 last week. This day, it fell to 1.30. Now, the income of Megaworld last year was 0.152 per share. Last June, its accumulated income for the year was at 0.09 per share. If this trend continues, it will end the year with a 0.18 per share income.

Usually, companies trade at 15 x the eps value. Using this simplistic formula, Megaworld should be trading at 2.28, given a flat income this year. But, since it is currently posting a growth, it should not be trading lower than 1.80 (at 10x anticipated eps).

When to buy then? If I am purely considering fundamentals, I will buy now. But, since we are also considering technicals, the right point to buy may be a little tricky. Right now, the market is trending downwards. Either we ride the trend all the way down to its rock bottom, or plunge in the market when there is a greater probability of rise. I think, it is still best to await the third quarter data.

(Image above is from (http://www.thedigeratilife.com. It was taken almost three months ago. Today, is gloomier.)