What Is the COLing the Shots of COL Financial?
COL Financial, currently the largest online stockbrokerage firm in the Philippines, curates a selection of stock picks and recommendations under the moniker “COLing the Shots.”
According to COL Financial, the primary objective of their “COLing the Shots” initiative is to provide timely and relevant information and analysis, coupled with a sample portfolio designed to facilitate successful investments.
Based on the most recent COLing the Shots publication dated June 2023, the firm continues to endorse the same 11 stock picks, citing the absence of significant developments in the respective industries of these picks.
The 11 stock picks identified by COL Financial encompass the REITs, Power, Holdings, Banks, Properties, and Consumer sectors.
What Are the Stocks in COLing the Shots?
Keep in mind that this list is as of August 29, 2023.
- Industry: REIT
Stock Code: AREIT
Company: AREIT, Inc. - Industry: REIT
Stock Code: CREIT
Company: Citicore Energy REIT Corp. - Industry: Power
Stock Code: AP
Company: Aboitiz Power Corporation - Industry: Holdings
Stock Code: AC
Company: Ayala Corporation - Industry: Holdings
Stock Code: SM
Company: SM Investments Corporation - Industry: Holdings
StocK Code: GTCAP
Company: GT Capital Holdings, Inc. - Industry: Banks
Stock Code: MBT
Company: Metropolitan Bank & Trust Company - Industry: Properties
Stock Code: ALI
Company: Ayala Land, Inc. - Industry: Properties
Stock Code: RLC
Company: Robinsons Land Corporation - Industry: Consumers
Stock Code: JFC
Company: Jollibee Foods Corporation - Industry: Consumers
Stock Code: PGOLD
Company: Puregold Price Club, Inc.
COL Financial’s style is to show an upside potential relative to the distance of the stock’s current price to its Fair Value. The Fair Value serves as their recommended Target Selling Price.
The broker says that it’s okay to buy the stock as long as its current price is below its Buy Below price.
Do I agree with that?
I don’t.
Here’s why: 4 Reasons to Stop Using Buy Below and Target Selling Price
Why Is COL Financial Bullish on Its COLing the Shots Stock Picks?
Despite the Philippine Stock Exchange Index’s underwhelming performance this 2023, COL Financial’s outlook on Philippine stocks remains optimistic.
As per COL Financial, the potential for a recession looms over the U.S. and other developed economies, but the Philippines stands with less vulnerability due to its economy being primarily driven by domestic factors. Local consumption accounts for over 70% of the GDP.
Furthermore, the susceptibility of domestic banks and local borrowers to increasing interest rates is also limited.
COL Financial’s March report, titled COLing the Shots, delved into this matter, revealing that a significant 78% of bank deposits consist of current and savings accounts.
This composition shields local banks from the repercussions of escalating rates on liquidity and funding expenses. Also, local banks exhibit robust capitalization. Even if they were to encounter losses on their held-to-maturity bonds in a mark-to-market scenario, their capital adequacy ratios are projected to surpass the minimum requirements set by the BSP.
Lastly, the effect of the BSP’s 425-basis-points rate hike since 2022 carries less weight for local businesses (in contrast to the Fed’s 500-basis-points increase from 0.25%) owing to the higher starting point of local lending rates and the general difficulty of obtaining credit within the nation.
Inflation has also continued to go down, reaching a mere 4.7% in July from 5.4% in June 2023.
According to COL Financial’s COLing the Shots, the Philippine stock market seems to be nearing the latter stages of the bear cycle, evidenced by low stock valuations, reduced foreign investor engagement, and declining daily turnover.
This situation indicates a greater potential for profit than loss, making stocks an attractive investment. However, patience is required, as the exact market turnaround remains uncertain.
Waiting might be necessary until the Fed alters its course, possibly prompting prolonged weakness in the U.S. dollar and reduced foreign bullishness on U.S. stocks, driving capital toward other markets.
To navigate risks, COLing the Shots reiterates their advice to avoid pricier stocks and concentrate on larger capitalized options that yield dividends.
These more substantial stocks typically lead the market’s recovery, while dividends ease investor patience.
COLing the Shots: Dividend Yield vs. Price Appreciation/Depreciation
I’d like to give a fair reminder again when it comes to investing in stocks purely because of dividends.
READ: 13 Philippine Stocks Yielding Over 10% Dividends (8.25.2023)
Like I said in the article above, remaining invested solely for dividends, even when they are insufficient to offset capital depreciation and ongoing price decline, lacks logical coherence.
AREIT
Cash Dividends (TTM, August 2022 – August 2023): P2.55
Dividend Yield (TTM): 7.73%
Price Change (TTM, August 2022 – August 2023): -8.59%
YTD Price Change (as of August 25, 2023): -6.78%
CREIT
Cash Dividends (TTM, June 2022 – June 2023): P0.23
Dividend Yield (TTM): 8.98%
Price Change (TTM, June 2022 – June 2023): 0.39%
YTD Price Change (as of August 25, 2023): 11.79%
AP
Cash Dividends (TTM, March 2022 – March 2023): P3.32
Dividend Yield (TTM): 9.49%
Price Change (TTM, March 2022 – March 2023): 3.33%
YTD Price Change (as of August 25, 2023): 2.79%
AC
Cash Dividends (TTM, July 2022 – July 2023): P10.726
Dividend Yield (TTM): 1.79%
Price Change (TTM, July 2022 – July 2023): 2.50%
YTD Price Change (as of August 25, 2023): -13.96%
SM
Cash Dividends (TTM, May 2022 – May 2023): P13.75
Dividend Yield (TTM): 1.67%
Price Change (TTM, May 2022 – May 2023): 9.10%
YTD Price Change (as of August 25, 2023): -8.33
GTCAP
Cash Dividends (TTM, March 2022 – March 2023): P6.00
Dividend Yield (TTM): 1.10%
Price Change (TTM, March 2022 – March 2023): -12.46%
YTD Price Change (as of August 25, 2023): 25.29%
MBT
Cash Dividends (TTM, March 2022 – March 2023): P5.20
Dividend Yield (TTM): 9.50%
Price Change (TTM, March 2022 – March 2023): 2.45%
YTD Price Change (as of August 25, 2023): 1.39%
ALI
Cash Dividends (TTM, March 2022 – March 2023): P0.419
Dividend Yield (TTM): 1.49%
Price Change (TTM, March 2022 – March 2023): -32.05%
YTD Price Change (as of August 25, 2023): -8.77%
RLC
Cash Dividends (TTM, May 2022 – May 2023): P1.02
Dividend Yield (TTM): 6.90%
Price Change (TTM, May 2022 – May 2023): -27.30%
YTD Price Change (as of August 25, 2023): -1.20%
JFC
Cash Dividends (TTM, April 2022 – April 2023): P3.37
Dividend Yield (TTM): 1.41%
Price Change (TTM, April 2022 – April 2023): 0.00%
YTD Price Change (as of August 25, 2023): 4.26%
PGOLD
Cash Dividends (TTM, January 2022 – January 2023): P1.36
Dividend Yield (TTM): 4.97%
Price Change (TTM, January 2022 – January 2023): -14.76
YTD Price Change (as of August 25, 2023): -21.63%
Summing It All Up!
COL Financial’s COLing the Shots could be helpful for complete beginners who are still learning the ropes of independent investing. However, it’s important to consider both the appreciation or depreciation of a stock’s price, rather than solely focusing on the dividend yield, for several important reasons.
Firstly, while dividends offer regular income, they are dependent on a company’s willingness and ability to distribute profits. Economic downturns or shifts in company priorities can lead to dividend cuts, negatively affecting the expected dividend yield. In contrast, a stock’s price appreciation is driven by the company’s growth potential, market sentiment, and broader economic trends, offering a more dynamic and potentially substantial return on investment.
Secondly, the stock’s price movement influences the total return on investment. A company with a modest dividend yield but a consistently growing stock price could generate higher overall returns compared to a high-dividend-yield stock with stagnant or declining prices. Ignoring price appreciation potential limits your ability to capitalize on market growth and innovation.
Furthermore, price volatility presents opportunities for strategic investors. Volatile stocks can be bought at lower prices and sold during upswings, yielding profits beyond dividends. This active approach enhances the potential for gains, whereas a narrow focus on dividend yield might lead to missed opportunities.
Therefore, a comprehensive investment strategy should weigh both stock price appreciation and dividend yield. This balanced approach considers capital growth, risk management, and the full spectrum of potential returns, enabling you to make informed decisions aligned with your financial goals.
Having been a stock investment consultant for over a decade, I’ve encountered numerous investors who express interest in a stock due to its reputation as a generous dividend-issuing company. However, whenever I inquire whether the stock’s price has grown by as much as, if not more than, the dividend yield, they often struggle to provide a definitive answer. In such instances, it becomes apparent that they may not have been aware of the points I’ve raised earlier.
Which of the 11 COLing the Shots Stock Picks You Should Not Buy?
I won’t definitively point out the stocks you should avoid or buy, because what’s suitable for me might not be the same for you in terms of capital appreciation and dividend yield, and vice versa. My goal is to encourage you to consider the idea of striking a balance between capital appreciation and dividend yield, instead of making one-sided decisions.
Is the title clickbait? Did I just trick you?
Not at all! Only those who prefer not to think rationally would see it that way.
If you’re looking to hire a private stock investment consultant and you like the way I think, complete this form to avail yourself of my stock investment consultancy service.
Are you looking to hire a content writer for your crypto and stock investment website? Here’s the form you need to fill out.
- Key Prices for PH Bluechip Stocks 30% Above 52-Week Low - June 4, 2024
- May 2024 Market Sentiment Rating of 30 PH Bluechip Stocks - June 3, 2024
- EquiTalks: ICT, BPI, AEV Updates – 5.29.2024 - May 29, 2024
Empire east land is to avoid,the worst stock
Aside from having a share price that’s been in the downtrend for over 10 years, what other metrics do you think make it an unattractive stock?