Jollibee! Where is the bee headed? - Marvin Germo

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Jollibee! Where is the bee headed?

By: Marvin Germo | June 29, 2014

Jollibee!  One of the most popular stocks bought, sold and held by many Filipino investors have seen a lot of success over the past few years as it has moved from 90+ to 190 Pesos per share in less than 2 years.  The stock also was at 35 Pesos per share at 2008 and at 10 Pesos Per share more than 10 years ago!  It’s an amazing story of a great brand that Filipinos have attached themselves to that has an even greater potential to grow even further.

JFC Stock Market

As of this writing JFC is currently in a short term down trend with the possibility of even going to 168 Pesos per share over the short term.

That’s what its price movement and action dictates but lets see how JFC faired in for the first quarter of the year!  Here’s the good and bad of Jolibee based on the 1st quarter of 2014.
The Good:
1.  JFC is making money in all other markets (aside from China and Vietnam) and it plans to expand further and open more branches abroad.
2.  For 2014 they are targeting 200 stores in the Philippines and 100 stores abroad to be opened.
3.  Sales from the Middle East and South East Asia grew by 32%.
4.  Net income is up at a record 1 Billion Pesos just for the 1st quarter alone!  This is up by 20% compared to its 1st quarter income for 2013!
5.  All of its local brands are expanding and growing due to the fact that more people have money to spend as evidenced by a bigger traffic in its stores and 27 Billion Pesos retail sales to show for!

The Bad:

1.  Jollibee’s businesses in China and Vietnam are not making money.  The losses are not that big though and are not game changers that would change the overall valuation of the company.
2.  P/E ratio of the company remains expensive as always at 38x P/E
To put it into perspective, JFC remains resilient and will continue to take advantage of the growth of the Philippine economy and the opportunities to earn further abroad.  The stock may be expensive but investors are coming in already knowing that to buy JFC they have to buy it at a premium compared to other stocks in the market.  At the end of the day, JFC is a great company with great promise.  Don’t just take my word for it, go check the numbers and see for yourself if this is a company that fits both your trading and financial plan!  As what I always say, the best place to be when you are investing is that you are fully convinced on what you are buying and selling into!


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