Spotlight: Alliance Global Group, Inc (AGI)

Business Overview:

AGI started out as a glass manufacturer before becoming a holding company, diversifying its business into 3 segments:  Real Estate, Food and Beverage, and Quick Service Restaurant Business.  Below are some of the subsidiaries under these business segments:

Real Estate (AGI interest): 

Megaworld Corporation  (57%) - publicly listed MEG
Global-Estate Resort (61%) - publicly listed GERI
Richmonde Hotel Group (57%)
Eastwood Cyber One (57%)
Empire East (33%) - publicly listed ELI

Food and Beverage (AGI interest):

Emperador Distillers, Inc (100%) - product:  Emperador Brandy
The Bar Beverages (100%) - product: The Bar
Alliance Global Brands (100%) - owns the foreign subsidiary handling Piknik potato snack products.

Quick Service Restaurants:

Golden Arches Development Corporation (49%) - operations and franchising of McDonalds in the Philippines.

AGI is owned and managed by Andrew Tan, counted among the top billionaires in the country.
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Quick Numbers:

Fundamentals:

Book Value of Equity (3Q 2011): ~ Php 122B**
Outstanding Shares: ~10.3B

BV/share: Php 11.90/share

Debt Ratio: 25%
Beta: 1.28

Net Income:
2011:  Php16B
2010: Php 7.5B

Assuming conservative growth, fair value for the company mainly based on earnings using DCF analysis would be :
Fair Value/share: Php18.4 


As of 4/4/12, AGI's market price is at 12.22/share which is already a little above its book value; however, considering conservative growth (sustainable and long-term), it still has a potential upside of 51% towards FV.

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Technicals:

AGI has corrected back down after teasing to break 13.04 (major resistance - previous high since Dec 2010).  The company's stock price has just been moving sideways ever since. A short term uptrend can be seen starting Oct 2011 (Green line).  50 day moving average (blue line) may stand as support while its MACD will try to form a higher low, bouncing back up hoping to finally break out from its more than 1 year resistance line.


** Special thanks to gunther of FM for pointing out that I was using Total Assets and not Shareholders' Equity as the book value.  I edited this post to modify the book value computations.
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This post does not give a comprehensive analysis on the company/industry.  This is only a summary or a company snapshot as of the date it was posted.  Spotlight stocks featured in this blog are being chosen arbitrarily, and are only intended for the blog owner's personal consumption; not as a form of solicitation to buy or to sell.  Comments from readers who would like to point out errors, to share ideas, etc are most welcome.