Stock picks show flight to quality

<p>PSE headquarters in Taguig City (CONTRIBUTED PHOTO)</p>
<p>MANILA - The current stock market slump requires investors to exercise caution and be selective with their investment decisions. According to our recent survey, market experts still recommend companies that are part of the Philippine Stock Exchange index (PSEi), along with potential blue chip candidates. Selected second-liner stocks have also gained attention from analysts.</p>
<p>April Lynn Tan, chief equity strategist at COL Financial Group, advises investors to consider diversified companies with stable dividends, as well as value plays with single-digit price-to-earnings ratio (P/E). Joseph Roxas, President of Eagle Equities, suggests focusing on undervalued stocks and identifying potential candidates for inclusion in the PSEi during the next index rebalancing.</p>
<p>Analysts from Regina Capital Development, Philstocks, and ATR Asset Management have also provided their preferred stock picks, which primarily consist of large-cap stocks. Here are their top recommendations:</p>
<h2>April Lynn Tan, COL Financial Group, Chief Equity Strategist</h2>
<li>Aboitiz Power Corp: Due to its defensive nature, Aboitiz Power is an attractive choice given the current economic risks. It stands to benefit from the tight power supply situation in the country, allowing it to sell uncontracted capacity at higher prices. The stock is currently trading at an appealing valuation of 9.9X P/E, with a dividend yield of 5.1% for 2023.</li>
<li>AREIT: With the expected decline in interest rates, AREIT is poised to benefit. Ayala Land's plan to inject P22.5 billion worth of rental properties, including malls, will diversify AREIT's portfolio and potentially make it the largest listed REIT in the PSE, leading to its inclusion in the PSEi. AREIT currently offers an attractive dividend yield of 6.1% in 2023 and 6.3% in 2024.</li>
<li>GT Capital Holdings: GT Capital's exposure to the banking and consumer sectors, along with its strategic partnership with Nomura Real Estate, make it an appealing choice. The stock is currently trading at a significant discount to book value and has a P/E ratio of only 6X.</li>
<h2>Joseph Roxas, Eagle Equities President</h2>
<li>Manila Water: Despite concerns related to a motion for reconsideration filed by Bayan Muna in the Supreme Court, Manila Water presents a good buying opportunity. Previous decisions have stated that a refund is not required, giving investors confidence. Roxas suggests buying at a price of P18 or below.</li>
<li>Bloomberry Resorts Corp: Bloomberry is expected to benefit from its upcoming gaming facility in Quezon City and has a positive income trajectory. Its potential inclusion in the PSEi and current market capitalization make it an attractive investment below P11 per share.</li>
<li>Metrobank: With a low P/E ratio compared to its peers and strong financial performance, Metrobank is an undervalued bank stock. Roxas suggests buying within the range of P55 to P57 per share.</li>
<h2>Luis Limlingan, Regina Capital Development Corp. Head of Sales</h2>
<li>Jollibee Foods Corp: JFC is expected to see a recovery in its dine-in segment as the pandemic subsides. With a recent wage hike and decreasing inflation, JFC is poised to benefit from increased consumer income and reduced costs. Prospects for store openings and better cost control also contribute to its upside potential.</li>
<li>Metrobank: Supported by a strong financial position and lending portfolio, Metrobank is well-positioned to thrive in the current interest rate environment. Its adjustments to rates and efficient operations contribute to its solid performance.</li>
<li>International Container Terminal Services Inc: As macroeconomic headwinds ease, ICT's trade operations are expected to rebound with expansions in strategic locations worldwide. The addition of new terminals and better operations management will drive growth for the company.</li>
<h2>Claire Alviar, Philstocks Financial Inc. Assistant Manager for Research and Online Engagement</h2>
<li>SM Prime Holdings Inc: Despite challenges posed by high inflation, SMPH is expected to maintain its revenue and net income growth. Factors such as a slowing inflation rate and tourism boost are likely to support the company's growth.</li>
<li>Puregold Price Club Inc: With easing inflation, Puregold is well-positioned as a leading retailer. Its business model and recent minimum wage hike contribute to its potential for increased sales. Positive earnings results in the first half of the year further highlight its growth potential.</li>
<h2>Mikhail Plopenio, Philstocks Financial Inc. Researcher</h2>
<li>Bank of the Philippine Islands: BPI's strong loan portfolio, particularly in consumer loans, makes it an appealing choice. With a focus on credit cards and robust revenue generation, BPI is expected to continue its growth trajectory.</li>
<h2>Dionill Jamil, ATR Asset Management Head of Equity Research</h2>
<li>Bank of the Philippine Islands: BPI's rapid loan portfolio growth sets it apart from other banks. Its focus on consumer loans provides a competitive advantage.</li>



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