Saturday, November 12, 2011

Rebirth of Real Estate

The properties sector, or real estate to be more specific, is a sector that is worth looking at on 2012. Properties are popping up like mushrooms in almost everywhere which means significant profits for companies in the real estate business.

BHI has been spectacular during 2011 going up by roughly 900% in just three months before going back down giving a year to date (as of this moment) of some 400% increase since it surged and retraced. From as high as 0.45, BHI went back down to 0.3 and even down to its current 0.2-0.22 levels after the news broke out that it is going to be suspended for three months prompting fear and panic.

At its current levels (0.2-0.22), BHI is somewhat cheap and once the renovations in Boracay is done, expect BHI to wake up once again.

Two other stocks that are worth looking (or probably even more worth looking) are ALI and FLI

ALI reported an increase of 30% of its net income in the third quarter. Ayala Land, the property arm of the oldest conglomerate in the Philippines, eyes to meet its 20,000-unit target by yearend. ALI's 9-month income was marked at P5.932B, a 33% increase from its P4.445B record of the same period last year.

Mid-level brand condominiums Avida is expected to continue ALI's rise throughout the year and expects to sustain its growth in 2012.

FLI on the other hand will start its P5.2B worth of projects late this year or 4th quarter of 2011. Filinvest cited projects on locations such as Ortigas, Sta. Mesa, Pasay City, Filinvest Corporate City, Cebu City, and Davao City as future developments.

FLI also increased its 9-month profit by 15% from P1.45B last year to P1.66B this year.

Fundamentally, FLI has a low P/E ratio at 13.9024, quite ideal to buy and its interim EPS exceeded its projected EPS. FLI has a projected yearend EPS of 0.08 while its interim EPS as of Nov. 11, 2011 is already at 0.082.

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