Recent BUY – AGI

buyNsellFinally, I made my first BUY for my dividend portfolio using my new TDO Buy and Collect Strategy. Actually, I posted a GTC BUY order for almost three weeks already before it was finally served today, you may think I’m cheap, I’m just looking for a best bargain to optimize my profit potential. Apparently, I did not get the best bargain price. I could have bought at a good bargain price should I monitor the live market session. AGI stock price was down by more than 7% today after the disappointing first quarter earnings was released.

I purchased 400 shares of Alliance Global Group, Inc. (AGI) today May 21, 2015 for Php23.35 per share.

Overview

Alliance Global Group, Inc. (AGI) was incorporated on October 12, 1993 and listed its shares on the Philippine Stock Exchange on April 19, 1999. AGI began operations in 1994 as a glass-container manufacturer after it acquired a glass manufacturing plant in Canlubang, Laguna. In 1999, it obtained approval from the Securities and Exchange Commission to broaden its primary business into that of a holding company. AGI is presently engaged in property development; food and beverage manufacture and distribution; quick-service restaurants; and integrated tourism development businesses.

In 2008, the Company entered into integrated tourism development, with gaming activities, by partnering with a multinational leisure, entertainment and hospitality group. In 2011, AGI expanded its integrated tourism estate development outside of Metro Manila, particularly in the Calabarzon and Visayan Regions. In 2013, the Company expanded its brandy manufacturing business in Spain.

AGI’s subsidiaries include Emperador, Inc.; Megaworld Corporation; Travellers International Hotel Group, Inc.; Global-Estate Resorts, Inc.; and Golden Arches Development Corporation.

Source: SEC Form 17-A (2013)

 DIVIDEND RECORD

I expect to see at least 3 straight years of uninterrupted dividend distribution, preferably more. I also want an initial yield of at least 1.50%, and a 3-year dividend compounded annual growth rate of 3.0%.

Let’s have a quick look on AGI Dividend record,

  • Dividend Streak: 5 years
  • Consecutive years of Dividend raises: n/a
  • Dividend Yield: 1.56%
  • 3yr Dividend growth rate: 1.82%
  • 5yr Dividend growth rate: 44.65%
  • Payout Ratio: 22.62%

Fundamentals

The company’s revenue increased from Php44.495 billion in fiscal year 2010 to Php125.405 billion in FY 2014. That’s a compound annual growth rate of 23.03%.

Earnings per share grew from Php0.71 to Php1.29 over this time frame, which is a CAGR of 12.69%.

Looking on TDO Score, my personal way to assess the quality and risk of a company, AGI has a TDO score of 73.64% which is above average. Note that a TDO score closer to 100% is consider as the safest company to invest with.

Valuation

I value stocks using the Dividend Discount Model with a 10% discount rate and 8% long term dividend growth rate. In addition, I do three other simple valuation techniques and do the average to arrive my target price for a stock. The average Value I get for AGI is Php32.20 hence my recent purchase gives me a profit potential of 37.90%.

Technical Overview

Before I finally buy a stock, I made sure that all timeframe will give me the BUY signal. This will give me a better price entry. I mention on my Technical Overview last Friday about the possible entry on AGI. Here’s my latest technical view on AGI:

Stock Picks, Target Prices and Buy/Hold/Sell Recommendations! (size 728x90)

Ticker TDO Score TYPE Monthly Weekly  Daily
AGI 73.64% Moving Avg BUY BUY BUY
Indicators BUY STRONG BUY BUY
Summary BUY BUY BUY

Conclusion

I’ve been invested in AGI for three years now. This purchase adds Php152.00 to my annual Dividend income, based on the current Php0.38 annual dividend.

I’m going to include the current valuation estimates from my brokers done by professional analysts, which I use these to concentrate my reasonable fair valuation estimate:

COLFinancial having a BUY rating on AGI, with a fair value estimate of Php33.20.

FirstMetroSec, with a fair value calculation of Php30.00.

What are your thoughts on AGI? Do you Like the stock?

Disclosure: I added a new page – my Dividend Portfolio under the Dividend Updates. This is part of my objective to be transparent in my quest to financial freedom through Dividend Investing. Note that I owned several stocks already prior to this new strategy. I HOLD them since those stocks are still worthy to be part of my portfolio.

Thanks for reading.

2 Comments on "Recent BUY – AGI"

  1. Sayang, if only i read this earliear binili ko sana si AGI at 22.55 kanina. Anyway, Thank you for the info, as always nman. A very helpful and informative blog. Keep it up!

    • Hi thelatebloomer777,

      First of all, Thank you! Your comment makes me more motivated to share. I’m happy to know na nakakatulong pala itong blog ko 🙂

      Foreigns are heavily selling AGI. Baka meron pa yan bukas, it is a good opportunity for you then. naka GTC kasi yung order ko na iyon kaya medyo napaaga entry ko.

      By the way, Professional Analyst from COL warns that AGI shares will most likely continue to underperform given the negative sentiment on RWM, MEG, and EMP brought about by their poor earnings performance. Given this information, you may plan your entry, if you really like this stock.

      Happy Investing!
      TDO

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