Additional Investment Opportunities in the Philippine Stock Market

Beyond the blue chip stocks in the PSEi, there are several promising investment opportunities in the Philippine stock market that align with the user’s requirements for stocks suitable for both short-term and long-term investment with minimal monitoring (2-4 times monthly). These recommendations are based on analyst insights, sector growth potential, and alignment with the user’s investment parameters.

Promising Sectors

1. Renewable Energy

The renewable energy sector in the Philippines is experiencing rapid growth, supported by government initiatives and increasing global focus on sustainability. Companies in this sector offer strong long-term growth potential with relatively stable short to mid-term performance.

2. E-Gaming and Digital Entertainment

The e-gaming sector has shown remarkable growth in the Philippines, with increasing player participation and revenue generation. This sector offers high-growth potential, though with potentially higher volatility.

3. Banking and Financial Services

With expected interest rate cuts from the Bangko Sentral ng Pilipinas, banking stocks are positioned to benefit from the decline in the cost of borrowing. This sector offers stability and regular dividend income.

4. Real Estate Investment Trusts (REITs)

REITs provide an opportunity to invest in real estate with higher liquidity and regular dividend distributions. They offer a balance of income and growth potential with relatively lower volatility.

5. Infrastructure and Construction

With the government’s continued focus on infrastructure development, companies in this sector are positioned for sustained growth over the medium to long term.

Specific Stock Recommendations

Renewable Energy Plays

1. AC Energy (ACEN)

Target Price: ₱6.80
Investment Case: ACEN remains a top pick as the company continues its aggressive expansion on the back of falling interest rates. The company is expected to add more installed capacity to its portfolio, increasing its renewable energy generation output.
Growth Metrics: Expected 25% earnings per share (EPS) growth for 2025, higher than peer average of 20%.
Suitability: Mid to long-term investment (1-5+ years)
Monitoring Requirement: Low (quarterly results review sufficient)

2. Citicore Energy REIT Corp. (CREIT)

Investment Case: CREIT has consistently performed well in the market, regularly declaring dividends. Its growth outlook is promising, backed by its sponsor, Citicore Renewable Energy Corp (CREC).
Key Strength: Regular dividend declarations provide income while waiting for capital appreciation.
Suitability: Short to long-term investment (suitable for all timeframes)
Monitoring Requirement: Very low (primarily for dividend announcements)

E-Gaming Plays

1. DigiPlus Interactive Corp. (PLUS)

Target Price: ₱28.70
Investment Case: PLUS continues to be a top pick due to the rapid growth of the e-gaming sector. As a dominant player with a 53-percent market share, PLUS is poised for continued growth, driven by increasing player participation.
Performance Metrics: In the first half of 2024, PLUS already exceeded its entire 2023 revenue record of ₱4 billion, delivering a net income of ₱5.2 billion.
Key Strength: High ROE of 27.5% expected for 2025 as the company continues to expand its operations.
Suitability: Short to mid-term investment (3 months to 5 years)
Monitoring Requirement: Moderate (quarterly results important to track growth trajectory)

Banking Sector Opportunities

1. Metropolitan Bank and Trust Co. (MBT)

Investment Case: For investors interested in momentum stocks with solid fundamentals, MBT is recommended. Market conditions have favored the banking sector, including Metrobank. Its strong earnings performance makes it more undervalued, making it an attractive dividend stock.
Dividend Outlook: Anticipated high dividends in 2025, driven by robust 2024 earnings, in line with its history of high yields.
Suitability: Mid to long-term investment (1-5+ years)
Monitoring Requirement: Low (semi-annual review sufficient)

2. Security Bank (SECB)

Target Price: ₱146
Investment Case: Well-positioned in the current monetary easing cycle. Unlike other banks, its net interest margins stand to benefit from decreasing policy rates. It has large exposure to home mortgage loans (16% of total loan portfolio versus 6-11% of peers), which should enable it to ride the recovery of the residential property sector.
Valuation: Target price-to-book multiple of 0.7x is justified by increasing ROE (9.7% in 2025, close to SECB’s low-double-digit goal).
Suitability: Mid to long-term investment (1-5+ years)
Monitoring Requirement: Low (quarterly results review sufficient)

Real Estate and Infrastructure

1. International Container Terminal Services, Inc. (ICT)

Investment Case: ICT is the Philippines’ number one terminal operator with numerous port facilities (32 terminals in 19 countries) across the Asia Pacific, Europe, Middle East, Africa, and The Americas. It offers a unique business proposition as the only terminal operator industry among the top listed stocks in the Philippine stock exchange.
Growth Outlook: Continuous terminal expansion and port facilities will likely boost ICT’s revenue in 2025 and beyond.
Suitability: Long-term investment (5+ years)
Monitoring Requirement: Very low (annual review sufficient)

2. Alliance Global Group Inc. (AGI)

Investment Case: While many stocks have rallied, pushing the PSEi above the 7,000 level, AGI has lagged, trading sideways and remaining at a loss year-to-date. This presents a potential value opportunity as the company’s underperformance has been primarily due to high interest rates affecting its business performance, which should improve with expected rate cuts.
Diversification Benefit: AGI is a world-class Filipino conglomerate with interests in food, beverage, real estate, tourism, entertainment, gaming, infrastructure, and quick-service restaurant businesses, including the country’s McDonald’s franchise.
Suitability: Mid to long-term investment (1-5+ years)
Monitoring Requirement: Low (quarterly results review sufficient)

Investment Strategy for Additional Opportunities

Portfolio Allocation Approach

Given the user’s monthly investment budget of PHP 5,000, a strategic allocation across these additional opportunities could complement the blue chip investments:

Core Allocation (60-70%): Blue chip stocks like Ayala Corporation (AC)
Growth Allocation (20-30%): High-growth sectors like renewable energy (ACEN) and e-gaming (PLUS)
Income Allocation (10-20%): Dividend-focused investments like CREIT and banking stocks (MBT, SECB)

Recommended Implementation

Month 1-3: Focus on establishing core blue chip positions
Month 4-6: Begin adding growth sector stocks (ACEN or PLUS)
Month 7-9: Add income-generating positions (CREIT or MBT)
Month 10-12: Review and rebalance based on performance

Position Sizing for Additional Opportunities

For the user’s PHP 5,000 monthly budget:

ACEN (₱5.80): Consider 1-2 board lots (100-200 shares) every 2-3 months
CREIT (₱2.50): Consider 2-3 board lots (200-300 shares) every 2-3 months
PLUS (₱25.00): Consider 1 board lot (100 shares) every 3-4 months
MBT (₱65.00): Consider 1 board lot (10 shares) every 2 months
SECB (₱120.00): Consider 1 board lot (10 shares) quarterly

Monitoring Strategy for Minimal Oversight

For an investor who can only check the market 2-4 times monthly, the following monitoring strategy is recommended:

Bi-weekly Check (2 times per month):
- Review overall market performance and any major news affecting holdings
- Check if any stocks have reached pre-determined buy/sell price points
Monthly Deep Dive (once per month):
- Review portfolio performance against benchmarks
- Assess if rebalancing is needed
- Check for dividend announcements
Quarterly Review (once every 3 months):
- Analyze company financial reports
- Reassess investment thesis for each holding
- Make strategic adjustments to allocation if needed

Conclusion

These additional investment opportunities beyond blue chip stocks provide diversification and exposure to high-growth sectors while maintaining alignment with the user’s requirement for investments that don’t require constant monitoring. The combination of stable blue chips like Ayala Corporation with select growth opportunities in renewable energy, e-gaming, banking, and infrastructure creates a balanced portfolio suitable for the user’s short-term, mid-term, and long-term investment horizons.

By implementing a strategic allocation approach and following the recommended monitoring strategy, the user can effectively manage their investments with minimal oversight while positioning for both capital appreciation and dividend income.