Ever since its IPO last year, I have been a great fan of this stock. Not only is this one of the finest consumption stocks in the land but it hits the very core of every strata of society. It has the high end brands that people who have excess money clamour for but on the otherhand it also has the bare essentials such as drug stores, groceries and convenience stores that even minimum wage earners spend into.
From it’s IPO price it has already gone up from 58 to 70.50 Pesos per share in no less than 8 months! It’s no double dragon, but it still is a good source of earnings! The average fair value for this stock is slated at 72. 90 pesos per share. From its current price the upside may not be as high.
One of the best places to have picked this stock up was at the start of June 2014 when it dropped to as low as 62 pesos per share. As what I always say in our stock smarts seminars, the best to buy is not when the stock is falling but when it has already fallen. The stock may also experience some selling when it reaches 71.50 pesos per share as there is a resistance at that point.
On a business perspective, the company will open 300 more stores nationwide! But what’s amazing about that is, the stores won’t just be primarily centered in Metro Manila but the bulk of the expansion is going to Visayas and Mindanao. This something I like, as this makes the growth spread further to the other regions of the country.
*Here’s an estimated breakdown of the expansion:
120 – Convenience Stores (Mini Stops)
100 – Drugstores (South Star Drug)
55 – Specialty Stores (Daiso, TopShop, TopMan, G2000, ToysRUs)
25 – DIY Stores (Handyman, True Value)
21 – Robinsons Supermarkets
4 – Department Stores
*estimate only as total reaches more than 300 stores
RRHI hits the core of our economy, the rising middle class, attributed by the BPO sector and OFW remittances. This is a company that is growing along side our economy. For long term investors, continually pick this up as it dips lower. For traders, continue to follow and respect the charts on when to come in and when to dispose of it and take profits.
I do hope this article provides you bits and snippets of information that would help you make money in the stock market as it is my greatest desire to see you earn and be profitable repeatedly over a long period of time. If you have any questions feel free to tweet me anytime of the day @marvingermo.
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*pictures via google search
*charts via bloomberg
*data via wallstreet journal