Puregold (PGOLD) might not be literally gold, but like gold is a safe haven

Probably when Lucio Co started business he wanted his business to have the attributes of gold, always valuable all the time.  Thus to him there could be no other befitting name to that business but Puregold.

PGOLD is debt-free, fortress balance sheet

As of the end of the first half of 2020 (1H20), Puregold Price Club, Inc. has zero borrowings/debt in its balance sheet.  It is debt-free as of the end of 1H20.  On top of that is the cash balance that piled up to 17.2 Billion Pesos.  While almost all businesses suffered revenue decline during the severest of the lockdowns, PGOLD grew its revenue by 15.1%.  That translated to a cash generation from operation of 4.4 Billion Pesos that is 1.6x versus the cash generated from the same period last year.  With minimal capital expenditure requirements, PGOLD’s free cash flow is enormous.

The Ayala Land boys facing mountainous debt could only wish for a “fortress balance sheet.”  They could only stare at PGOLD’s balance sheet in envy. For those who want to see what a fortress balance sheet looks like, take a look at PGOLD’s.

12 Billion Pesos additional capital for expansion

Without the need for borrowing, PGOLD at ease raised 12 Billion Pesos from the issuance of 7 to 10 years Fixed Rate Corporate Notes taking advantage of the weak interest rate environment.  The borrowing doubles the cash balance of PGOLD providing it with more ammunition for expansion.

No wonder, institutional investors led by Genesis Investment Management LLP, GSIS and SSS, crowd PGOLD.  Institutional investors now corrals 12.38% of PGOLD.

No hype, low profile PGOLD’s value go unnoticed

Price to book value ratio of PGOLD is just at 2X compared to 12.25X of that of MM. Choose your bet, MM with a so so business model raising 1.5 Billion Pesos or PGOLD raising 12 Billion with a solid business model.

For those who want to portray a David and Goliath story for MM and PGOLD, please don’t.  PGOLD is a giant but thinking and acting like a David, while MM is a minnow but thinking and acting like a Goliath.

If you think of a safe haven, think of PGOLD. PGOLD is no hype and low profile.

Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent view point. Accuretti Systems Inc. in the course of day to day trading may have own, or is considering buying or disposing, the shares of the companies mentioned in this commentary.

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