FLI (Filinvest Land) poised for take-off

On November 23, 2020 trading Filinvest Land, Inc. (FLI) jumped 5.83% to close at 1.09 a share.  Volume for FLI on that day reached 73.2 Million shares.  That would be 4.7X FLI’s 65-day average volume.  That event could be a prelude to the recovery of the share price of FLI.

Real estate stocks have been among the severely battered stocks and the slowest to recover.  Among its peers FLI has the lowest Price/Book Value ratio. FLI has a P/BV ratio of 0.343 beating Rockwell Land (ROCK)’s 0.4276 and Shang Properties (SHNG)’s 0.362.

The stock price recovery of FLI could follow the recovery of its operations.  For the nine-month period ending September 30, 2020, FLI generated cash from its operations of 5.7 Billion Pesos.  That cash from operations has very well covered cash dividends of 0.8 Billion Pesos and interest and transactions costs of 2.9 Billion Pesos leaving some 2 Billion Pesos for debt payments.

The only drawback in the result was that FLI has funded its capital expenditures with short-term loans.  During the nine-month period despite the pandemic, FLI spent 4.4 Billion Pesos on investment properties.  But that has been recently addressed by its successful bond issuance.  FLI raised 8.1 Billion Pesos in that exercise. That effectively would refinance FLI’s short-term loans.  FLI is paying an ultra-low interest of 3.3353% for the 3-year bonds and 4.1838% for the 5.5-year bonds.

FLI’s successful bond issuance could be the turning point of its operations and its share price.

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Disclaimer and Disclosure: This analysis is an independent viewpoint on publicly traded stocks in the Philippine market.  Accuretti Systems Inc. trades stocks in the Philippine market.

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