Green for a Change

I can't count how many times I've actually had fellow traders mentioned that phrase to me the past two weeks. "Thank goodness it's green for a change". So what's been happening?

Nothing much has changed in the broader international geo-political landscape; the ME and North Africa is still in turmoil or is heading there. Protests are still popping up despite repressive decrees and laws. And to traders, oil is still much higher than what it should be trading at today.

Locally, foreigners have been buying into stocks that I seem to like; especially SCC, EDC, DMC, etc. These stocks have for some time been under the radar of numerous local and foreign brokers and have been frequently mentioned by big-time brokers like Mr. Gus Cosio. These stocks have had good support levels and have held them when the market was dropping fast. They now seem to be picking up in terms of pricing. Valuation-wise, earnings and prospective earnings have made it clear that these companies have some more upside.

Some significant notes to make for each of these companies.

DMC - the government has released their lineup of PPP projects for the year, and although DMC is not expected to bid directly; it is to benefit from contractor work. Full year 2010 earnings have also seen an 89 percent jump and is poised to grow even more. Numerous brokers have mentioned that DMC is in line for a major re-rating of valuation.

SCC - coal prices have been steadily creeping up due to delays and adverse weather conditions in Australia. Calaca power plant is expected to boost earnings after major rehab finished last year.

EDC - while it has under-performed both the market and the sector. EDC has been valued by JP Morgan, ATR Kim Eng, First Metro, BPI, COL, Deutsche just to name a few. It is expected to outperform this year with a trend in green energy putting a premium on its value.