From a low of 1.39 on March 13, 2020 ACEN steadily climbed to a high of 6.93 on November 24, 2020. Since then, ACEN has been trading at the 6+-peso level. At that level ACEN is valued at 17.98 P/E higher than the P/E of any power generation company. FGEN has a P/E of 8.71 while Aboitiz Power (AP) has a P/E of 17.66. ACEN’s P/BV ratio of 4.56 is significantly higher than FGEN’s 0.8338 and AP’s 1.58.
ACEN’s market capitalization is at 87.1 Billion Pesos, only 16.5% lower than FGEN’s 104.3 Billion Pesos despite having a significantly lower revenue and net income than FGEN. ACEN’s revenue is only 19.02 Billion Pesos. That revenue is 79.2% lower than FGEN’s revenue. Same with net income, ACEN’s net income of 2.95 Billion Pesos is 75.1% lower than FGEN’s 11.84 Billion Pesos.
The rise of ACEN to that level can be credited to no other but the retail traders. Recent data shows that top institutional shareholders just hold 0.48% of ACEN as compared to 5.11% of FGEN and 3.93% of AP. Retail traders crowded ACEN.
Independent appraisers commissioned by the Ayala’s valued ACEN at only 2.97 a share. Even the sovereign wealth fund of Singapore (GIC Private Limited) would invest in ACEN at only 2.97 a share.
Retail trader’s appetite for ACEN shares had ACEN’s subsidiary Bulacan Power disposing ACEN shares to the market of mostly retail traders. Yeah, why not sell them to the market of retail traders at 6.6+ when the Ayala’s will pay only 2.97 a share for them.
Probably, there is really something in ACEN that the market of retail traders knows that the independent appraiser commissioned by the Ayala’s doesn’t.
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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.