Fundamental Analysis: Top Companies in Spotlight in 2023

Fundamental analysis is a popular investment approach that is widely used by investors in the Philippines to identify undervalued stocks with the potential for long-term growth. This approach involves analyzing a company’s financial statements, industry trends, and economic conditions to determine its intrinsic value.

The Philippines is a fast-growing economy with a vibrant stock market that offers numerous investment opportunities to investors. However, investing in the stock market carries risks, and it is important for investors to conduct thorough research and due diligence before making investment decisions.

Fundamental analysis provides a systematic approach to evaluating stocks based on their underlying financial and economic conditions. This approach helps investors identify undervalued stocks that have the potential to generate strong returns over the long term.

 

 

 5 examples of stocks to which you can apply fundamental analysis

 

Jollibee Food Corporation

  • Strong fundamentals support the business. A lesser combination of growth, profitability, debt, and visibility exists in more than 70% of businesses.
  • Overall and in the near future, the business offers an intriguing fundamental situation.

Strengths: 

  • Analysts presently project a very strong rate of earnings growth for the upcoming years.
  • The sales projection has been increased quite a little during the past 12 months.
  • The EPS projections of the stock’s analysts have been significantly revised upward during the past year.
  • For the past four months, the company has experienced consistently and considerably higher EPS revisions.
  • Analysts are optimistic about this stock. The stock should be purchased or overweighted, according to the average consensus.
  • Over the past four months, analysts who are interested in the stock have significantly raised their average price targets.
  • Over the previous four months, there has been a marked improvement in analyst opinion.
  • The judgments of analysts have been sharply revised upward over the last twelve months.
  • The group typically announces positive findings with high surprise rates.

Weaknesses:

  • The company operates with high earnings multiples, with predicted P/E ratios for the current and following fiscal years of 33.37 and 27.87, respectively.
  • The size of the balance sheet suggests that the company is highly valued.
  • The company offers shareholders little to no dividends. It is not a yield company as a result.
  • The consensus analysts’ price targets are quite different from one another. This demonstrates varying opinions and/or a challenge in appraising the business.

 

Globe Telecom 

Strengths:

  • The company’s margins are especially strong before interest, taxes, depreciation, and amortization.
  • The company has one of the highest expected dividend yields in the market.
  • Analysts have been gradually raising their EPS projection for the upcoming fiscal year over the past twelve months.
  • Over the past four months, the perception of analysts who cover the stock has improved.
  • Over the past 12 months, consensus analysts’ assessments of the company have undergone a significant revision.

Weakness:

  • A glaring issue is the company’s projected earnings per share (EPS) growth over the following few years.
  • The company’s financial state is one of its main weaknesses.
  • Over the past four months, analysts who are interested in the stock have drastically lowered their average price targets.
  • Analysts who follow the company have varying price targets. This suggests that it may be challenging to evaluate the company and its operations.
  • The corporation typically disappoints with its earnings announcements.

 

San Miguel Food and Beverage

  • Based on a relative rating of the company within its sector, the company’s Refinitiv ESG score is particularly poor.

Strengths:

  • Currently, San Miguel Food and Beverage do not show any significant strength

Weakness:

  • The company frequently reports earnings that are below expectations.

 

 

McDonald’s

  • The company looks to be particularly low regarded from a medium and long-term investment perspective based on a variety of fundamental qualitative factors.
  • According to Refinitiv, the corporation has a strong ESG score when compared to its industry.

Strengths:

  • The company has significant margins before depreciation, amortization, and taxes as a result of its comparatively high EBITDA/Sales ratio.
  • The company’s margins rank among the highest on the stock exchange list. Its main business generates considerable earnings.
  • Analysts are optimistic about this stock. The stock should be purchased or overweighted, according to the average consensus.
  • The group’s efforts in the upcoming years are highly visible. Analysts that follow the equity continue to have similar predictions for future earnings. Sales for the current and succeeding fiscal years are supported by such sparsely dispersed estimates as being highly predictable.

Weaknesses:

  • Analysts predict that this category of companies will have one of the lowest rates of growth.
  • The company’s finances are hampered by a large amount of debt and relatively low EBITDA levels.
  • The company operates with high earnings multiples, with predicted P/E ratios for the current and following fiscal years of 33.11 and 25.76, respectively.
  • The corporation has one of the greatest “enterprise value to sales” ratios in the entire world.
  • Given the cash flows produced by the company’s operations, it is valued significantly.
  • Sales forecasts have been dramatically revised downward during the past twelve months, which suggests that lower-than-expected sales volumes are anticipated for the current fiscal year.
  • Analysts have dramatically lowered their earnings projections over the past year.

 

Planet Fitness

Strengths:

  • One of the company’s key strengths is the anticipated significant growth for the upcoming fiscal years.
  • According to the consensus of analysts that cover the stock, the company’s earnings per share (EPS) are anticipated to increase significantly over the following several years.
  • The company has significant margins before depreciation, amortization, and taxes as a result of its comparatively high EBITDA/Sales ratio.
  • Analysts have consistently increased their sales projection for the company over the past year.
  • Analysts who follow this firm typically advise overweighting or buying the stock.
  • Over the past four months, the perception of analysts who cover the stock has improved.
  • The judgments of analysts have been sharply revised upward over the last twelve months.
  • The group’s efforts in the upcoming years are highly visible. Analysts that follow the equity continue to have similar predictions for future earnings. Sales for the current and succeeding fiscal years are supported by such sparsely dispersed estimates as being highly predictable.

Weaknesses:

  • With enormous debt and very low EBITDA, the corporation is in a difficult financial position.
  • The corporation is valued rather well based on earnings multiples. In fact, the company is receiving 62.44 times its projected earnings per share for the current fiscal year.
  • The corporation has exceptionally high valuation levels based on current prices.
  • Given the cash flows produced by its operations, the corporation is highly valued.
  • Analysts’ average price targets have been dramatically revised lower during the previous four months.
  • The company typically reports earnings that are lower than anticipated.

 

Universal Robina Corporation

Strengths:

  • The sales projection has been increased several times over the past twelve months.
  • Analysts have continually increased their revenue projections for the company, which offers promising opportunities for revenue development in the current and following years.
  • Analysts are optimistic about this stock. The stock should be purchased or overweighted, according to the average consensus.
  • The average price objective of analysts has dramatically increased during the last four months.
  • Over the previous four months, there has been a marked improvement in analyst opinion.
  • The judgments of analysts have been sharply revised upward over the last twelve months.

Weaknesses:

  • A obvious flaw is the company’s projected earnings per share (EPS) growth over the following few years.
  • High earnings multiple valuations are advantageous to the company.
  • The company frequently reports earnings that are below expectations.

 

Ayala Corporation

Strengths:

  • The company’s value level is a benefit because of the favorable cash flows that its operations generate.
  • Analysts who follow this firm typically advise overweighting or buying the stock.
  • The average target price set by analysts who cover the stock is higher than current pricing and has a significant potential for appreciation.

Weaknesses:

  • The company’s finances are hampered by a large amount of debt and relatively low EBITDA levels.
  • When it comes to paying out dividends to shareholders, the corporation is not the most generous.
  • Over the past four months, analysts who are interested in the stock have drastically lowered their average price targets.
  • The analysts’ consensus has been dramatically revised lower over the last year.
  • Analysts who follow the company have varying price targets. This suggests that it may be challenging to evaluate the company and its operations.
  • Financial reports have consistently let down market participants. They frequently fell short of expectations.

 

Metro Pacific Investment Corporation

Strengths:

  • The company’s margins are especially strong before interest, taxes, depreciation, and amortization.
  • The company’s margins rank among the highest on the stock exchange list. Its main business generates considerable earnings.
  • Regarding pricing based on earnings multiples, the equities is among the most appealing on the market.
  • The stock price of the company appears to be relatively low when compared to its net book value.
  • Analysts who follow this firm typically advise overweighting or buying the stock.
  • The average target price set by analysts who cover the stock is higher than current pricing and has a significant potential for appreciation.

Weaknesses:

  • The company’s financial state is one of its main weaknesses.
  • The corporation has one of the greatest “enterprise value to sales” ratios in the entire world.
  • Over the past four months, the stock’s average consensus view among analysts who cover it has gotten worse.
  • Analysts who follow the company have varying price targets. This suggests that it may be challenging to evaluate the company and its operations.
  • The corporation typically disappoints with its earnings announcements.

 

Aboitiz Equity Ventures

  • The company’s fundamentals are weak overall, making it unsuitable for medium- to long-term investment.

Strengths:

  • The sales projection has been increased several times over the past twelve months.
  • Analysts have dramatically increased their estimates of the company’s sales during the past four months.
  • Over the past four months, analysts who are interested in the stock have significantly raised their average price targets.

 

Overall, You can apply fundamental analysis in every stock you can find in the Stock market in order to assess the situation before entering a trade.

 

 

 

 

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