Eagle Cement [EAGLE] [link] had its petition to delist approved by the PSE. San Miguel [SMC 106.80 0.6%] completed the tender offer for substantially all of EAGLE’s outstanding publicly-held shares, leaving only 0.0419% of EAGLE’s stock in public hands after completion of the tender offer. SMC will own 99.95% of EAGLE when it delists on February 28, 2023.
MB Quick Take: Delisting seems like such a rare occurrence that it's kind of shocking to me when it happens. Based on some of the early earnings teasers from other cement manufacturers, it looks like the industry is going to face some serious headwinds this year. Lots of changes. EAGLE just gave its 2-weeks notice!
Balai ni Fruitas [BALAI 0.72 9.1%] [link] will expand its distribution in Cebu to include supermarkets and convenience stores. BALAI said that its baked goods are already being carried in at least three Gaisano mall locations and a couple 24 Summit Pharmacy locations in Cebu.
MB Quick Take: What I like about Lester Yu’s Fruitas Group is that it is not married to any particular method of doing business. It’s not so in love with its original concept that it couldn’t imagine doing anything other than kiosk retail. Pandemic? Boom. App-based delivery. Already on the road? Build a platform and deliver other brands and products. Having trouble reaching new customers that aren’t on the app or already visiting stores? Put the product in grocery stores or in convenience stores. Wholesale is all about volume, so the numbers will need to get higher than a handful of grocery stores in Cebu, but they should already have gathered a bunch of actionable metrics from having distribution through the existing stores in Cebu. This group is light on its feet.
PLDT [TEL 1,310.00 1.2%] [link] acknowledges that a securities class action lawsuit may have been filed against TEL in the US, in the US District Court of California, alleging violations of federal securities laws against nine of TEL’s current and former employees for damages related to the drop in TEL’s share price after the P48 billion budget overrun was discovered in December. TEL said that it is aware that such a suit may have been filed, but that it has yet to be served with a copy of the complaint, and doesn’t have any other info on the potential case.
MB Quick Take: Class action lawsuits are meant to group together plaintiffs that all have similar fact patterns, to allow the plaintiffs to join together against a common opposing party, to recover amounts that might be too small in their individual state to justify financing a lawsuit against a massive and sophisticated corporation. The media on this lawsuit all mention “Sophia Olsson”, but the mention of her name is only administrative: she’s just the representative of the class of persons who were (allegedly) wronged by what happened. The case needs a name, and so they select a representative from the pile of people who were harmed to have their name at the top of the page. All of that said, class action lawsuits are slow-moving, and I can’t imagine things would move more quickly with the defendants (TEL executives) living and working in a foreign country. You can read the complaint here.
Filinvest REIT [FILRT 5.78 0.3%] [link] puts out press release to pump 7.35% yield for dividends paid in 2022, based on FILRT’s closing price of P5.50/share on the last day of 2022. FILRT said that it demonstrated “steady growth” and that its occupancy rates and rental rates were “well above the industry rates” in the locations where their properties are located.
MB Quick Take: I feel like this is clever framing by FILRT to make 2022 look far better than it actually was. They only considered dividends paid in 2022, which (helpfully for them) includes the Q4 dividend from 2021 which was P0.112 per share (one of their largest), and excludes the absolute stank Q4 dividend from this year, which was just P0.071 (the smallest in FILRT’s history). Then, by doing the yield calculation with the end-2022 stock price, which was at all-time lows for FILRT, the amount of the dividend looks much higher by comparison. I’m not saying that FILRT is wrong to only count 2022 paid divs, or to use the end-2022 price to calculate the yield, only that both of these choices are needed to puff up FILRT’s performance to that 7.35% yield level. How was that 2022 yield for people that bought FILRT at its P7.00/share IPO price? (Answer: 5.8%) How was that 2022 yield for people that bought at the height of FILRT’s price in early January? (Answer: 5.1%) This is why I like a forward-looking yield calculation, by annualizing the REIT’s last dividend, and using that method with FILRT’s current price and terrible Q4/22 dividend, it has an estimated annualized yield of 4.9%. Also, I’m not sure what FILRT means by saying that it’s demonstrated “steady growth”, when the REIT’s gross revenue and net profit in Q3/22 were lower than what it posted in Q1/22, and drastically lower than what it posted in Q3/21.
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