SCREENER (II): List of Philippine Common Stocks with Low EV/EBITDA, Low P/E, and Low P/B

Continuing with the stocks retained from our first screen, presented below are all the common stocks listed on the Philippine Stock Exchange (“PSE”) also meeting the following criteria:

  • Net Debt-to-Net Working Capital (“ND/NWC”) Ratio below 0.6 for property, mining, and oil companies and 0.9 for all other sectors
  • Capital Adequacy Ratio (“CAR”) above 15.0% for banks
  • Non-Performing Loan (“NPL”) Ratio below 4.0% (gross) or below 2.0% (net)
  • Last Traded Price not higher than 25.0% from 52-Week Low

All financial data was retrieved from the companies’ latest audited financial statements for the quarter ended September 2021. All prices were retrieved at market close on December 9, 2021 (GMT +8).

The above screening criteria was adapted from the following excerpt from Chapter 14 (Stock Selection for the Defensive Investor) of The Intelligent Investor (Revised Edition) by Benjamin Graham:

“For industrial companies current assets should be at least twice current liabilities—a so-called two-to-one current ratio. Also, long-term debt should not exceed the net current assets (or ‘working capital’). For public utilities the debt should not exceed twice the stock equity (at book value).”

Benjamin Graham

The ND/NWC Ratio was used in lieu of the Long-Term Debt-to-Net Current Assets Ratio to provide even more stringent parameters in response to uncertainties surrounding the ongoing COVID-19 pandemic. Net Debt was computed by subtracting total cash from total debt. Net Working Capital was computed by subtracting current assets less cash by current liabilities less debt. An ND/NWC Ratio of 0.6 was required for companies in property, mining, and oil to provide a wider margin-of-safety given the potentially more vulnerable and capital-intensive nature of these industries.

For banks, a CAR of 15.0% and an NPL Ratio of 4.0% (gross) or 2.0% (net) was required in lieu of the ND/NWC Ratio.

Companies trading at more than 25.0% over their 52-Week Low were also eliminated. This extra screen was adapted from the following excerpt from a 2000 MSN Money article by famed “Big Short” Michael Burry:

“As for when to buy, I mix some barebones technical analysis into my strategy—a tool held over from my days as a commodities trader. Nothing fancy. But I prefer to buy within 10% to 15% of a 52-week low that has shown itself to offer some price support. That’s the contrarian part of me.”

Michael Burry

Financials

NameTickerCARGross NPL52-Week LowLast Traded PriceDifference (%)
Asia United Bank CorporationAUB16.59%1.98% *PhP41.45PhP44.407.12%
China Banking CorporationCHIB15.30%3.40%PhP22.80PhP25.6512.50%
Metropolitan Bank & Trust CompanyMBT20.66%2.12%PhP43.00PhP52.0020.93%
Rizal Commercial Banking CorporationRCB15.15%3.30%PhP16.50PhP20.3023.03%
* Net value used in lieu of gross value due to lack of coverage

Industrial

NameTickerND/NWC52-Week LowLast Traded PriceDifference (%)
Cirtek Holdings Philippines CorporationTECH0.69PhP3.60PhP3.702.78%
Crown Asia Chemicals CorporationCROWN0.00PhP1.45PhP1.7420.00%
Integrated Micro-Electronics, Inc.IMI0.58PhP7.03PhP8.1515.93%
Ionics, Inc.ION0.24PhP0.70PhP0.700.00%
Macay Holdings, Inc.MACAY0.00PhP5.18PhP6.0015.83%
Pryce CorporationPPC0.00PhP4.92PhP5.6615.04%
RFM CorporationRFM0.00PhP4.36PhP4.585.05%
SFA Semicon Philippines CorporationSSP0.61PhP1.05PhP1.093.81%
Victorias Milling Company, Inc.VMC0.00PhP2.19PhP2.5014.16%

Holding Firms

NameTickerND/NWC52-Week LowLast Traded PriceDifference (%)
Cosco Capital, Inc.COSCO0.00PhP4.80PhP5.106.25%

Property

NameTickerND/NWC52-Week LowLast Traded PriceDifference (%)
Cityland Development CorporationCDC0.00PhP0.72PhP0.754.17%
D.M. Wenceslao & Associates, Inc.DMW0.00PhP6.30PhP6.909.52%
Global-Estate Resorts, Inc.GERI0.14PhP0.80PhP0.867.50%
Megaworld CorporationMEG0.47PhP2.60PhP3.1621.54%

Services

NameTickerND/NWC52-Week LowLast Traded PriceDifference (%)
Asian Terminals, Inc.ATI0.00PhP13.00PhP14.007.69%
SSI Group, Inc.SSI0.42PhP1.05PhP1.159.52%
Waterfront Philippines, Inc.WPI0.35PhP0.46PhP0.473.30%

Mining & Oil

NameTickerND/NWC52-Week LowLast Traded PriceDifference (%)
Global Ferronickel Holdings, Inc.FNI0.00PhP2.00PhP2.115.50%
Oriental Peninsula Resources Group, Inc.ORE0.00PhP0.68PhP0.748.82%

Featured Image: Katrina Tuliao

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