San Beda College Alabang

8 Don Manolo Blvd., Alabang Hills Village,

Muntinlupa City, 1770
INTEGRATED BASIC EDUCATION DEPARTMENT (K-12)

Company Portfolio Analysis

Submitted In Partial Fulfillment of

the Midterm Requirements for
ECO 110 - Applied Economics

Submitted to

KIT HOHN F. DEL MUNDO

Applied Economics Teacher

Submitted by:

ALCRUZ, ALYSSA MAE M.

HABULAN, ALEXA MARIE C.
VILLALUZ, MARY BERNADETTE A.
Table of Contents

I. Introduction
A.
II. Company/Firm Analysis
A. Fundamentals
B. Technical (pre-finals)

III. Buy-Sell Strategy (pre-finals)

Introduction

The Philippine economy is strong and will likely grow faster than most other countries in
the region over the next few years. These three factors have helped improve the country's
economy (1) the population growth in the Philippines, (2) language proficiency, and (3) Strong
economic fundamentals. The population in the Philippines is continuously growing as the years
pass. According to kmcmaggroup.com, they stated that the young generation of the Philippines
would indeed have a positive effect on the economy. They also said that "the Philippines will
have a more stable pool of workers and a much larger labor force, which can help in the growth
of various industries." Moreover, This is because English is the primary language of teaching in
educational institutions and the language of trade and law. Language proficiency is another one
of the nation's assets that have boosted economic growth and have made the Philippines the
world's top location for voice outsourcing, surpassing India in 2012. With this, the BPO sector of
the economy is thriving as strong command of the English language is needed for call centers
and in the BPO industry in general. (Coface.com, n.d.) Furthermore, the solid growth in the
manufacturing and service sectors is also driven by increasing investments and improved
infrastructure, contributing to higher economic growth in the private and public sectors. These
factors have helped improve the country's business environment and have led to increased
foreign investment in the country. (World Bank Group, 2018)

Considering these favorable circumstances, the Philippines is still facing challenges in

(1) The Philippines' geographical location, (2) Lack of business transparency, and (3) Slow
growth in the agricultural sector. The Philippines is located in Southeast Asia, and because of
this, the country is prone to typhoons, especially from June to November, according to PAGASA.
One important conclusion was that while more powerful but less often typhoons may produce a
drop of up to nearly 3% in local economic activity, frequent, low-damaging cyclones are likely to
cause a reduction of approximately 1%, according to Stroble (2019). In addition, World Bank
data says, "As the population and the economy grew, energy consumption increased, transport
use, and industrial activity in all the production and services sectors." Corruption is a common
problem in many developing markets around the world. The lack of business transparency
makes it difficult to monitor the activities of local firms to ensure that they comply with the laws
and regulations governing their business activities. It undermines investor confidence and
increases the risk of business failures in the future. The government needs to reduce corruption
in business and promote greater transparency in business transactions. (Uftrs, 2021) The
agricultural sector in the Philippines needs to be developed more when compared with other
emerging markets in the region. It needs to be developed and more efficient, which limits the
country's ability to maximize its natural resources. (Country Report Philippines, 2013)

As time passes by, telecommunications is continuously growing and making a huge

impact in our economy. Today, telecommunications is very popular with the help of the internet
which is being used by people all over the country and all around the world. But is
telecommunications a good service to invest in given its performance in today’s generation, and
will this do good in the future?
 a. Telecommunications
i. Security for the present and future generations. At this time and age, having
access to media or the internet is more of a need instead of it being a want. A big
factor behind this is because of the covid-19 virus that is still circulating all over
the world today. Having access to this is all because of telecommunications, this
helps us have access to the internet and communicate with others. With this the
telecommunications sector will keep on growing from here given that no one
knows what the future holds, but for the present and future generations to be
secure, shifting to an online setup is the best option, and telecommunications will
play a big role because of this.
ii. Economic growth; given that the telecommunications sector will continuously be
increasing in the following years to come, It’s important to know the importance of
the telecommunications industry. According to fieldsenses.com, there are
multiple ways telecommunications can pull economic growth, “such as, lowering
costs for information, search, and transactions, while improving the efficiency of
markets for goods, labor, capital, and services”.
iii. A reason why telecommunication is very valuable is because it encourages
education. With the help of technology, people now have access to other learning
opportunities aside from traditional education. In today’s time and age, all you
need is a computer or mobile phone and the internet to access the unlimited
learning references online. According to allaccesstele.com (2019), they stated
that “online courses provide students with the freedom and flexibility to both work
and study at the learners given time”.

Stock Company Analysis

PLDT Inc.
Sector: Services
Sub-Sector: Telecommunications

Company Details
Philippine Long Distance Telephone Company, generally known as PLDT Inc., is a
Philippine-based telecommunications provider. Since its establishment in 1928, the business
has grown to become the top supplier of telecommunications services in the Philippines,
providing voice, data, and multimedia services to individuals, organizations, and governmental
bodies.(PLDT Inc Company Profile - PLDT Inc Overview, n.d.)
Stock Performance

https://www.investagrams.com/Stock/PSE:TELTREND

TREND
Short Term: Sideways (1.80%)
Medium Trend: Downtrend (-4.30%)

Dividends
Fixed-line, mobile, and broadband internet services are all provided by the Philippine business
PLDT Inc. The business has a history of giving dividend payments to its investors, proving its
dedication to generating value for them. According to PLDT Stock Dividend - Investing.com PH
(n.d.), In 2021, PLDT announced a cash dividend of PHP 75.00 per share to all stockholders of
record as of March 23, 2021, equating to a total distribution of PHP 29.3 billion. The company's
solid financial standing and dedication to its dividend policy are reflected in this payout.
Investors seeking steady profits are expected to keep coming to PLDT because of its regular
dividend payouts.

Price to Earning P/E Ratio

According to PLDT Long Term Debt 2010-2022 (PHI, n.d.), the Price to Earnings (P/E) ratio for
PLDT Inc. is 13.66, which is lower than the industry average. This indicates that the stock is
currently undervalued, making it a potential buying opportunity for investors.

Debt Ratio
The debt ratio for PLDT Inc. is currently at 0.79, which is higher than the industry average This
means that the company has a relatively high level of debt compared to its peers. However, the
company has been able to manage its debt effectively, and its interest coverage ratio is currently
at 6.64, which is higher than the industry average. This indicates that the company is capable of
meeting its interest payments. (PLDT Long Term Debt 2010-2022 | PHI, n.d.)

Corporate Earnings
Due to the success of its residential and corporate divisions, the company generated
consolidated service sales of PHP 173.2 billion in 2021, an increase of 6% from the previous
year (PLDT.com, n.d.). Its core net income rose 5% to PHP 26.2 billion in the meantime. The
company's robust profitability was also boosted by its cost optimization initiatives and
investments in new technology. PLDT's leadership position in the Philippine telecommunications
market, combined with its commitment to improving customer experience, has contributed to its
continuous growth in recent years. In order to better serve its customers and provide long-term
value for its shareholders, the company is continuing to concentrate on growing its digital
services and upgrading its network infrastructure.

Demand Drivers
The company's success can be linked to a number of demand factors that have impacted the
Philippines' telecommunications sector. These factors include internet penetration, increasing
smartphone adoption, and the expansion of digital services. . PLDT has been in the forefront of
meeting these demands as the biggest and most reputable operator in the market, investing
heavily in its infrastructure and technology to expand its service offerings and improve customer
satisfaction. Understanding the key demand factors that are influencing the Philippine telecoms
market in this regard is essential to comprehending PLDT's growth trajectory and its potential for
future success.

Potential Growth Drivers

● Driver 1: Internet Penetration

Demand for PLDT services like broadband internet and mobile data will rise as more
Filipinos have access to the internet. The COVID-19 pandemic has expanded the trend
of distant work and distance learning, which has raised the requirement for dependable
internet access to students, employees, and many more.

● Driver 2: Increasing smartphone adoption

More individuals are adopting mobile data services for communication, social media,
online shopping, and entertainment as smartphone use increases. With this, one of the
top mobile network operators in the nation which is Smart Communications, the wireless
division of PLDT, is well-positioned to profit from this development.

● Driver 3: Expansion of digital services

Due to the widespread adoption of digital technologies by enterprises, PLDT has been
increasing the range of digital services it offers, including cloud computing, cybersecurity,
and e-payment solutions. Digital services from PLDT are projected to experience rising
demand as more businesses use digital technologies.
 Technical Analysis

SUPPORT AND RESISTANCE LEVELS

Support and resistance levels are important technical indicators in financial markets such as
stocks, forex, and commodities. Traders use support and resistance levels to make informed
decisions on when to enter or exit trades and set stop-loss and take-profit levels. A support
level is a price level at which demand for security is strong enough to prevent its price from
declining further. Base on the PLDT Inc. graph, the stock is at Php 1,210 per share. It can be
seen that the support level is very stable for the last three years it can be consider as strong
support. Also, there is high probability of increase in demand. Therefore, it may be good to buy
shares at Php 1,210.

In contrast, a resistance level above the current stock price, representing a price level where
sellers have previously entered the market and prevented the price from rising further. It means
that traders are stepping in to sell their shares, which creates a ceiling for its price. So this may
be a good time to sell as the selling pressure may push the price lower. It can be seen from the
PLDT Inc. graph, the resistance level is at Php 1,750. That being the case, it is good time to sell
share and take profits, as it may not increase further.
MOVING AVERAGE - 100 DAY

Moving Average is a statistical metric used to examine data points by calculating a series of
averages of distinct subsets of the entire data set. Each point in a moving average of length 100
is calculated as the Average of the preceding 100 data points and shows the long-term moving
average of the company. To make it simpler to spot trends and patterns, this form of Moving
Average is frequently used to smooth out variations in stock prices or other financial data over
an extended period.

The direction of the stock price's general trend may be determined using the price trend in a
moving average of 100 days. Prices above the 100-day Moving Average are often seen to be in
an uptrend. Conversely, the price trend below the 100-day moving average is considered to be
in a downtrend. Based on the graph of the PLDT Inc. the price trend is below from its 100-day
moving average and not even close to the golden cross, indicating that the stock price may not
cross above the moving average line.

Considering the price trend is below the 100-day moving average, it is NOT GOOD to buy stock
and is generally seen as a bearish signal. It suggests that selling pressure may continue soon;
since the stock is downtrend. Hence, buying the stock at this time may not be advisable, as it
may be subject to further price declines
Relative Strength Index (RSI)

The Relative Strength Index is a momentum indicator that determines how quickly
prices move and signals when their direction has changed. It is used to spot
divergences, price reversals, and overbought and oversold zones. A positive deviation
and a shift in price direction are indicated when the original price chart forms a lower
low, and the RSI makes a higher low. A break above the oversold region means
entering a new, extended position. On the other hand, a bearish divergence occurs
when the price's high is higher on the original chart, but the RSI from an overbought
situation records a lower high.

There are negative and positive price reversals in the RSI. A positive reversal occurs
when the price corrects an uptrend and makes a higher low while the RSI makes a
lower low. Typically, this lower low falls between 30 and 50. When a downtrend
correction hits a higher high just below overbought levels, between 50 and 70, the RSI
indicates a negative reversal. Looking into the RSI of PLDT Inc, The graph shows that it
is in between, which means it is neither good nor bad to buy socks. However, based on
the previous months seen in the graph, the line may stay the same or go beyond the
RSI oversold level. It is suggested that it needs further observation and analysis before
making investment decisions.
Moving Average Convergence-Divergence (MACD)

The indicator used in the image above is the MACD or what is called the “Moving Average
Convergence Divergence”. This is an indicator used to signal buy and sell opportunities of stock
or security. With this, the yellow line in the graph represents the MACD while the blue line
represents the signal. If the yellow line is below the signal, it indicates that it is gonna have a
downtrend. If the yellow line on the other hand is above signal, then it indicates that it will have
an uptrend.

In the graph, the yellow line or the MACD was below the blue line or the signal in the last week
of March indicating that it is a downtrend. After a few days, the yellow line has surpassed the
blue line and with that, it indicates that it will be an uptrend. Based on the signal, this company
is good to buy but will be needing further confirmation. As a result of the yellow line falling below
the signal in the last week of March, and the yellow line exceeding the signal in April, this
indicates that the uptrend is possible to continue and further grow. With this, the company is or
will be suitable to be bought by this time. However, it might have to need further confirmation as
the yellow line may go below the signal again since it has already happened during the last
months. To add on to this, despite the yellow line going above the signal, it has only been
steady or consistent, therefore, it is advisable to wait until it signals that the macd is starting to
move upward.
 Buy-Sell-Cut Loss Plan

Buy-Sell Plan

Price Level Volume Total

Buy Price Php 1,196.27 80 Php 95,701.60

Sell Price Php 1,816.59 80 Php 145,327.20

Holding Time 4 Months

Expected Profit 49,625.60 (51.86%)

Cut Loss Plan

Strategy Fixed-Price and Time Bounded

Cut Loss Plan ● Sell all shares if it fell to Php 1,186.27

● Sell all shares if profits are NOT realized by four months.

Indicators Observation Judgment

Support-Resistance Buy Price is Near Strong Good Buy

Support

MA 100 Price is far below MA 100 Not Good

RSI RSI is neither Not Good

\oversold/overbought

MACD MACD has crossed the signal Good Buy / Needs

line Confirmation

Fundamentals Increase in demand due to no Good Buy

school, students will be at
home using the internet.

Decision

After reviewing the analysis, it is advisable to buy the shares of PLDT Inc. as our judgements
contained more positive observations on the different indicators used. To conclude, once the
MACD has been confirmed, we would buy the stocks of PLDT Inc.

.
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