PSE Stock: SOLID GROUP INC. (SGI)

[drenevich]

I know this stock is not popular. But from the financials, this stock is literally trading for free. Profit margin is not impressive though.
Any thoughts regarding this stock?

[TSO]

I'm pressed for time at the moment, so I'll just grill you.

1. How long public?
2. Total Asset Turnover?
3. Debt Ratio
4. What's their business? Ano produkto nila? How do they make money?

[drenevich]

Hi TSO, thanks for replying. I'll try my best to accurately provide the data.

1. Formerly United Paracle Mining Company, according to the PSE website it was listed 1948. In 1996, a new set of stockholders made changes to the company from being a mining company to the present holding company, thus changed it's name to Solid Group Inc. It was also that year 1996 when they listed additional shares to the public. Since then, the company is not engaged in mining.
If this is the case, can we say that the company went public in 1996?

2. Total Asset turnover during year 2010 is 26.5%.
    As of 3rd quarter 2011 is 36%

3. Debt to equity ratio during 2010 is 29%
    As of 3rd quarter 2011 is 36%

4. a) Main distributor of Sony electronic equipments and devices, operates repair and service centers.
    b) Operates broadband service through destiny cable
    c) Manufactures and sells mobile phones(MyPhone)
    d) The company also sells and leases real estate.
Main revenue contributor is the sales of mobile phones and electroninc devices.

Current: Book Value per share = 4.52
             Working Capital per share = 1.74

Pasensya na TSO kung kulang or magulo yung data ha. Next time maayos din. I'm learning a lot here. 

[joconcepcion]

Hi TSO, thanks for replying. I'll try my best to accurately provide the data.

1. Formerly United Paracle Mining Company, according to the PSE website it was listed 1948. In 1996, a new set of stockholders made changes to the company from being a mining company to the present holding company, thus changed it's name to Solid Group Inc. It was also that year 1996 when they listed additional shares to the public. Since then, the company is not engaged in mining.
If this is the case, can we say that the company went public in 1996?

2. Total Asset turnover during year 2010 is 26.5%.
    As of 3rd quarter 2011 is 36%

3. Debt to equity ratio during 2010 is 29%
    As of 3rd quarter 2011 is 36%

4. a) Main distributor of Sony electronic equipments and devices, operates repair and service centers.
    b) Operates broadband service through destiny cable
    c) Manufactures and sells mobile phones(MyPhone)
    d) The company also sells and leases real estate.
Main revenue contributor is the sales of mobile phones and electroninc devices.

Current: Book Value per share = 4.52
             Working Capital per share = 1.74

Pasensya na TSO kung kulang or magulo yung data ha. Next time maayos din. I'm learning a lot here. 

In addition: gLobal destiny cable is part of Solid Group of Companies, one of the largest cable provider in metro manila sir TSO.

[TSO]

1. Formerly United Paracle Mining Company, according to the PSE website it was listed 1948. In 1996, a new set of stockholders made changes to the company from being a mining company to the present holding company, thus changed it's name to Solid Group Inc. It was also that year 1996 when they listed additional shares to the public. Since then, the company is not engaged in mining.
If this is the case, can we say that the company went public in 1996?

Yes. The company changed businesses.

2. Total Asset turnover during year 2010 is 26.5%.

Ew. Combined with low profit margins? That does not sound good.

3. Debt to equity ratio during 2010 is 29%

So that means Debt Ratio is 22%. Sounds okay, I guess.

4. a) Main distributor of Sony electronic equipments and devices, operates repair and service centers.
    b) Operates broadband service through destiny cable
    c) Manufactures and sells mobile phones(MyPhone)
    d) The company also sells and leases real estate.
Main revenue contributor is the sales of mobile phones and electroninc devices.

Is there transparency in the reports? Do they say how many devices they sold? Or how many people are subscribing to Destiny cable?

Current: Book Value per share = 4.52
             Working Capital per share = 1.74

I don't need this yet.
Post Merge: 1330402878And just so you know,

I don't care if a company is the "largest" this or that. What matters is if it's a good stock.

What is a great business is not necessarily a good stock. Keep that in mind.

[drenevich]

The report doesn't show how many units it has sold and the number of subscribers. It only shows the revenues of each business segment.

Post Merge: 1330402860What is a great business is not necessarily a good stock. Keep that in mind.

Can you explain this statement I think this is important to keep in mind just like you said. But this is my understanding:
A company may have a great business but for it to be a good stock is a different story. It all goes down to the price you paid for the stock. For example, you bought shares of stock in a very big, profitable company but if you paid the wrong price(very high) it's not a good investment.
Ganito po ba ibig sabihin nun? 

[TSO]

The report doesn't show how many units it has sold and the number of subscribers. It only shows the revenues of each business segment.

Hmmm. Lack of transparency. That's bad. Are you sure you're looking at the 17-A? Or are you looking at their actual annual report?

Well, here's a suggestion here. Does a public company own Sky Cable? If yes, check if they provide numbers.

A company may have a great business but for it to be a good stock is a different story. It all goes down to the price you paid for the stock. For example, you bought shares of stock in a very big, profitable company but if you paid the wrong price(very high) it's not a good investment.

Exactly.

And by the way, this also applies when you're buying out businesses ala Buffett or M&A style.

Why?

The company I'm analyzing right now bought this company for $369 million. Guess what, that sticker price is a clear overpayment. Not only was it mostly funded by debt, but also the price assumed a very optimistic growth rate for the next seven years. If you were to go for a zero-growth value of the company, the ideal price should've been $233 million. So malaki ang growth premium na binayaran.

It says a lot about the people orchestrating the M&A transaction.

[joconcepcion]

@ TSO - about 500,000 subscriber in metro manila. FYI.

Hmmm. Lack of transparency. That's bad. Are you sure you're looking at the 17-A? Or are you looking at their actual annual report?

Well, here's a suggestion here. Does a public company own Sky Cable? If yes, check if they provide numbers.


Exactly.

And by the way, this also applies when you're buying out businesses ala Buffett or M&A style.

Why?

The company I'm analyzing right now bought this company for $369 million. Guess what, that sticker price is a clear overpayment. Not only was it mostly funded by debt, but also the price assumed a very optimistic growth rate for the next seven years. If you were to go for a zero-growth value of the company, the ideal price should've been $233 million. So malaki ang growth premium na binayaran.

It says a lot about the people orchestrating the M&A transaction.

[drenevich]

That's from the 17-A I downloaded from the PSE website. I'll check if skycable is transparent with their number of subscribers. I'm not sure if I'm going to check it from LPZ or ABS though. Thanks TSO!
When I finished checking their annual report, honestly I had doubts if it's true. I mean, if the price of the stock is equal to or lower than it's working capital then it's selling for free right? This happens very rarely. 

[TSO]

@ drenevich

when a stock is trading for a low multiple, you have to determine whether it is a value trap or a real bargain. It's only selling for free if it's lower than working capital or something.

Look for their annual report (not SEC filing), if they have any. Maybe there's info on their Destiny subscribers though. Lack of transparency is always a red flag.

@ joconcepcion

500K people? Since when? And for what year?  Where did you get the info in the first place?

Even if you got it from an insider, I would ask for very specific information over a period of multiple years.

[pmtmember]

Still not looking good for SGI holders after the Shooting Star incident last mid August. Generally it is still downward trend maybe with some rallies along the way. Today's candlestick doesn't give us any clue if this will go up but looking at Fibonacci Retracement it seems it is going to test the support at 50% level any time soon.

Caveat!

How are you SGI

[pmtmember]

It seems that yesterday's Engulfing Pattern has been confirmed by today's candlestick. Price didn't move past the resistance which is at 38.2% Fibonacci Retracement level. In fact price move away from it at the closing. Major support is waiting around 1.89 - 18.6 But 2.0 for a psychological support.

Caveat!


SOLID GROUP, INC.

[Senyor]

October 11, 2012 Thursday

mahusay analysis ng thread na to. Bili ako ng SGI.Ganda ng chart sa taas. litaw yung sagot. respetado ang rsi. at yung tramline na ginuhit talaga namang pa akyat.

[pmtmember]

After today’s disclosure about SGI‘s dividend, there might be a technical play for this stock as we see a Hammer at the bottom of the downtrend. The Bullish Hammer Pattern is a significant candlestick that occurs at the bottom of a trend or during a downtrend and it is called a hammer since it is hammering out a bottom. The Bullish Hammer Pattern is a single candlestick pattern.

Notice also how the bulls pushed the price above the 50% Fibonacci Retracement level after it dip below that level.

The reliability of Bullish Hammer Pattern is low. It requires confirmation of the implied trend reversal by a green candlestick, a large gap up or a higher close on the next trading day.

Caveat!



Dividend play for SGI?

[pmtmember]

We have seen the rally of SGI early on but it seems the resistance at 38.2% Fibonacci Retracement level was too difficult to break at this point. After touching that level it retraces and never went back. If you have settled for 4-5% gain this morning then you might just have the right decision. Tomorrow's price action should break and stay above the 38.2% to make the bullish sentiment stay.

Caveat!



Careful on SGI