Watch the video with Andrew Stotz or read a summary of the country profile on The Philippines.
Four Pillars of GDP: Private Consumption and Investment
At 6.6%, The Philippines has the second fastest GDP growth in Asia (only India’s is faster). Private consumption and investments are the main drivers of the economy, but net exports created a large drag on GDP growth at -1.6%.
Expensive but moderately attractive
The Philippines totes the highest valuation in Asia on a price-to-earnings basis at 21x in 2017CE*.
A decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a Read More
However, analysts are expecting earnings to grow at a low 3.4% this year.
A. Stotz Four Elements: The Philippines’ rank relative to Asia
Overall, The Philippines is a moderately attractive market in Asia, considering all our four elements: Fundamentals, Valuation, Momentum and Risk.
Fundamentals: The nation sported a moderate ROE in the past 12 months, relative to Asia as a whole.
Valuation: It remains expensive, because PE is the highest in Asia and earnings growth is low.
Momentum: The country offers poor price and earnings momentum.
Risk: The country offers low beta to Asia ex Japan with moderate volatility.
Real Estate did best among top 3 largest sectors in 3Q17
Top 3 largest sectors: Industrials: 26% of the market; Financials: 23%; Real Estate: 18%.
Best sector & stock: Information Technology: +17.9% & Integrated Micro-Electronics Inc.: +38.7%.
Worst sector & stock: Materials: -5.9% & D&L Industries Inc.: -16.4%.
*CE is consensus estimates
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