One of the victims of President Duterte’s crusade against the water companies is Metro Pacific Investments (MPI). Headed by Mr Manny Pangilinan. The reason for its being an investment prospect is mainly because of its 45% stake in Meralco, because of this, a couple of analysts are now claiming that the stock is undervalued.
MPI’s Meralco stake is at 45%, translated into peso, that is around P150 billion. But currently, MPI’s market cap is only around P95 billion. Not only you are buying its P150 billion stake in Meralco at almost half the price, other businesses like the tollroad business, PLDT, hospitals etc are now for free. Classic value investment.
Though we think of its subsidiaries and stake in other companies, we should also remember that MPI’s stake in other businesses are not debt free. The debtors also have a stake in that come bankruptcy. But what are the odds that could happen to MPI?
The only thing I don’t like about MPI and how they handle the company was its debt and its dilution. But other than that, I have nothing against the company.
Investments like this are very enticing. If I buy, I get a lot of other businesses for free. Definitely one of those good opportunities that comes buy once in a while. But this opportunity is just one of the many. Because of many companies affected by the water issue, is this the only stock you want to buy or are there other’s that would bring in more returns for you? Are you going to go all-in in this one stock? Or are you going to spread it out?
I don’t know right now as I am still researching. But definitely MPI is one such stock that you can’t ignore for now. You just have to look deeper into it.
What do you like about the stock? Are you buying this stock right now? What’s your reasoning behind it?