WHAT IS CONVERGENCE & DIVERGENCE?
Convergence generally means coming together, while divergence generally means moving apart. In the world of finance and trading, convergence and divergence are terms used to describe the directional relationship of two trends, prices, or indicators.
These Stocks & very closely moving together till recent events.
MPI – OUR FOCUS
- Core income expanded on the back of strong energy sales and increasing contribution of toll business. Metro Pacific Investments Corp.
- Core net income increased by 3% to P12.5bn. This came in line with consensus forecasts, factoring in seasonality, accounting for 81% of FY19 estimate (four-year average first half earnings: 81% of full year).
- For the first nine months of the year, operating income printed at P16.4bn (+6% y-o-y) supported by its power and toll businesses while reported net income stood at P11.8bn (-5%), negatively affected by the FX translational losses of P695m as against to the gain of P297m in 2018.
- On a consolidated basis, income margin slightly declined to 76.2% from 79.1% as toll road business booked higher interest costs from borrowings used to partially finance investments in PT Nusantara.
VALUATION LOOKS UNDER-VALUED
- P/E is 9x
- Whereas its counterparts are @ 13-14x
- Good for Value Investing (MPI)
- Most business that MPI is creating revenue for the shareholders
- Consider buy to hold for Dividends and riding the Momentum approach
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