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Stocks to ride on earnings, window-dressing, virus

By James A. Loyola

This week, the market will be swayed by earnings reports of several index stocks while continued concerns over COVID-19 will hopefully be offset by month-end bargain hunting.

“We’re expecting the market to move within the 7,200 and 7,500 range as COVID-19 worries linger while, on a positive note, anticipation of 2019 corporate earnings results may lift sentiment along with the month-end window-dressing,” said Philstocks Financial Research Associate Claire Alviar.

Online brokerage 2Tradeasia said that, “With participants in earnings mode, corporates will likely have to clarify growth expectations, especially in the context of COVID-19 and Taal eruption impact, among others.”

It noted that, “As the macro picture awaits more cogent policies to counter COVID-19’s economic impact, corporate watchers will continue to heed for capex and earnings feelers for 2020, and from there weigh whether ‘hope springs eternal,’ amid the noise.”

“Volume scenario in the coming week may be characterized by a crescendo, with a holiday (Tuesday) early in the week possibly thinning out turnover, before later finding momentum on funds’ window dressing,” 2Tradeasia added.

Among firms that have already disclosed their 2019 earnings, top online brokerage firm COL Financial is recommending a BUY for Ayala Land because “residential projects are in stages wherein revenue recognition is slow and therefore it is just a matter of time when revenues trend up once again.”

“We believe the ALI’s fundamentals remain solid in the medium term as it continues to expand its leasing portfolio, which should drive revenue growth during this period of slow residential revenue booking,” it added.
COL has also upgraded its recommendation on Security Bank to BUY following the recent selloff in the stock.

“We believe the selloff was unwarranted as we continue to like SECB given in light of its focus on profitability as well as its fast-growing consumer loan portfolio,” it noted.

COL has also upgraded its rating on GT Capital to BUY also following the recent selloff in the stock due to its stake in Metro Pacific which owns part of Maynilad Water Services.

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