DMC or DMCI Holdings, Inc. is a company established by the Consunji family to incorporate all their interests in different businesses; which today includes construction, real estate, mining, power generation, utilities, etc. The company was incorporated in 1995 and it has shown tremendous growth in both share price and value in the past couple of years or so.
There are a number of reasons why I enjoy trading DMC. Aside from its high growth over the past year (close to 300 % in 2010 alone), its companies have also managed to sustain a very good business model with growth being engineered in each company for the next few years.
Take for example Semirara; the only listed subsidiary, DMC owns 50+ percent of. The company is poised to almost double profits this year due to the coming on-line of their Calaca Power Plant and the higher prices of coal (unfortunately, due to cyclones in Australia). The price of this stock has grown exponentially from a 40 range last year to the 200 range this year; of course, with more room to grow.
Maynilad is 45 percent owned by the DMC (55 percent owned by MPI), the company has a relative monopoly of the water distribution in some parts of MM. With planned spending to improve their efficiency, the company is set for higher profits in the next few years or so.
Their construction arm isn't doing so bad as well; with 48 billion pesos worth of backlogs in construction contracts, up from 2 billion two years ago.
Another interesting thing to note about DMC is that another one of their subsidiaries is planning a IPO this year, namely DMCI Homes.
Putting all that I have mentioned above together with the fact that DMCI is still trading below the sectoral average for PE ratios in holding companies and its poised for higher EPS growth than most other companies in its sector. I believe DMC is trading at dirt cheap prices at this point. I mentioned before that even at 40 pesos/sh I would be a buyer of DMC. Today though, the price of the stock has garnered support at the 32 level and its been trading a range between 32 and 35. If patience is not one of your virtues, I do suggest trading that range. But trading the range of this company is by no means a sign of my lack of confidence in this companies growth potential.
ey pretzel twister,
ReplyDeletelooking at the latest Citisec DMC report. It says here, DMC is Forecasted to have around 3.79 EPS for 2011. At current prices of 33, PE is only around 8.7, that's dirt cheap. and at 40 / share, PE is still at 10.55 still very attractive. Even at 45 / share, PE is still at 11.87! talk about a huge potential.
I also bought more DMC at 32.80 today.
@ anonymous
ReplyDeleteDespite today's poor showing. I'm still in the opinion that the market will bounce back strong this year
ive stacked DMC and MPI as my over weight.. what do you guys think
ReplyDelete@anonymous 2
ReplyDeleteI love DMC and i think MPI is strong. My only reservation with MPI is that its capital expenditure is huge and I don't think it will translate into huge earnings any time soon.