In a press release dated today, Universal Robina Corporation (URC) announced its most recent acquisition, the Central Azucarera Don Pedro, Inc. (CADPI).
URC is the largest listed food company and involved in a wide array of food-related businesses. Recently, the company reached an agreement with Roxas Holdings Inc (ROX) to acquire CAPDI’s milling and refining assets, and land owned by RHI in Batangas.
Under the agreement, URC will acquire all machinery and equipment, buildings and its improvements. Transportation equipment, spare parts, and the location itself are included in the clause.
However, this transaction is still under the Philippine Competition Commission’s (PCC) evaluation.
URC believes that the acquisition will form new synergies in the sugar industry in Batangas. This purchase would benefit the sugarcane farmers, stakeholders, sugarcane workers, and the community.
Batangas corners a considerable bulk of the total annual sugar production.
For the crop year 2017-2018, the province will have produced an estimate of 2,600,000 million 50-kg bags or 6 percent of the annual national output.
Currently, URC operates six sugar mills all over the country. These mills produce refined sugar, raw sugar, and molasses.
The company also owns a 20-megawatt cogeneration plant, an ethanol plant, and a liquid CO2 plant.
First Half Earnings
For the first half of the year, URC’s sales in its branded consumer foods segment (BCFG) reached PHP 50.40 billion.
The figure is higher by 2.3 percent versus the recorded PHP 49.266 billion in the same period last year.
From its packaging division, URC earned PHP 752 million for the first half of the year. This figure is 9.30 percent higher than the PHP 688 million recorded in 2017.
Higher prices and volume contributed to the earnings for the first half of 2018.
Universal Robina Corporation’s agro-industrial segment totaled to PHP 5.50 billion — a 14.6 percent rise from the PHP 4.79 billion in 2017. Its feeds business rose by 22.80 percent due to the higher sales volume of hog feeds and dog food.
Meanwhile, the farm business was up 5.7 percent. The increase was actually due to higher selling prices.
Sales from commodity foods segment (CFG) totaled to PHP 7.73 billion for the first six months of the year. This figure is a 27.8 percent increase versus last year’s PHP 6.05 billion.
The sugar industry saw substantial growth, rising by 50.80 percent. A significant increase in sales volume of refined and raw sugar drove the growth.
Furthermore, URC’s flour business grew by 9.8 percent, brought about by higher prices and volume for both pasta and flour.
Forming an Ascending Triangle
URC is poised to break its resistance and the neckline of the ascending triangle (a bullish formation) it has been creating.
The 200 SMA is still acting as resistance. The 15 EMA and 20 SMA are working as immediate support for quite some time already.
Volume is already starting to side with the bulls. MACD is also bullish. RSI is also bullish but is not at overbought levels.
Meanwhile, support is estimated at around 136.50 while resistance is at the neckline at 141. Should the stock complete the breakout, the target is about 170.
However, the next resistance is still at 145.
Volume
As of August 23, 2018, at 03:30 PM, the volume of URC is 127.92% of the previous trading day.
Remember the correlation between price and volume.
- bullish price + high volume = high sustainability (price)
- bullish price + low volume = low sustainability (price)
- bearish price + high volume = high sustainability (price)
- bearish price + low volume = low sustainability (price)
Risk Level
Furthermore, URC has a LOW-RISK level due to its risk percentage of 30.97%.
Foreign Fund Flow
URC registered a Net Foreign Buying worth P68,333,418.00 as of August 23, 2018.
On a 30-day trading period, URC is on a Net Foreign Buying worth PHP930,472,635.00.
Top 10 Players’ Sentiment
Trading participants of URC with a 100% Buying and Selling Activity as of Aug-23-2018 at 03:30 PM:
5 out of 40 participants or 12.50% of all participants registered a 100% BUYING activity
13 out of 40 participants or 32.50% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 139.8667
Top 10 Players’ Selling Average: 139.7743
The psychological average price of the top 10 players as of Aug-23-2018 is from 139.7743 to 139.7743.
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