A. Soriano Corporation popularly known as Anscor (ANS) is an investment holding company with a hedge fund like operation with almost half of its assets in a trade portfolio (fair value through profit and loss investments/FVPL) which amounted to around 11 Billion Pesos as of December 31, 2019.
The market turmoil brought about by the COVID-19 pandemic shed 1.2 Billion Pesos of market value from its trading portfolio.
The market turmoil is an opportunity to snap up undervalued assets to those investment holding companies with sufficient liquidity. ANS is caught with no enough liquidity, thus, it is not poised to take advantage of the depressed valuations of assets brought about by effects of the pandemic.
It is good that ANS is not leveraged and therefore is not under pressure to liquidate its portfolio at depressed valuations. It liquidated only about 700 Million Pesos of its portfolio at most likely break-even price to raise cash to support its dividend distribution in March 2020. It distributed that huge one-time dividend to give its stockholders something to get by during the pandemic.
Its operating investment, Phelps Dodge Philippines, and its 11% interest in KSA Realty Corporation, the owner of the The Enterprise Center, an office building located at Ayala Avenue corner Paseo De Roxas in Makati City, is generating cash for ANS. The cash generated from those investments together with dividend income from its portfolio will be enough for its day to day cash burn.
Disclaimer: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent perspective. Accuretti Systems Inc. does not hold any Anscor shares.