The lock-up period for MM shares comes to an end yesterday, releasing 6 billion shares that would otherwise be available for sale by directors and majority shareholders. This equates to almost 80% of the company’s total outstanding shares. As a result, we predict some weakening in the stock, as these shareholders may decide to take advantage of MM’s almost fivefold growth since its initial public offering (IPO) to take gains. At its present price, the company is trading at a trailing price-earnings ratio (PER) of 452.0x, which we believe is much too high. As a result, we suggest investors to take advantage of MM’s stratospheric values by moving to less expensive alternatives such as PGOLD, which trades at a more fair price.
Motor vehicle sales in May increased by more than 360 percent when compared to the same month the previous year, however this enormous increase may be anticipated considering that May 2020 was still impacted by more restricted lockdowns. A significant portion of the overall sector’s total sales was still compromised by the import safeguards that had been implemented. Despite the fact that last month’s industry sales totaled more than 22,000 units, they were still only 71 percent of the pre-pandemic monthly average. However, this represented a 23 percent improvement over April, which had been impacted by the re-imposition of the MECQ on the NCR+ bubble. We believe the improvement was even greater for Toyota Motors PH, because the company has expanded its operations outside of the greater NCR area, which would have been less affected by the renewed lockdowns, and it has a more favorable product mix of imported and locally assembled units, which exempts 50% of its sales from the safeguard duties. This is good news for GTCAP. The recent rebound in the stock market has pushed the holding company’s stock price over our objective (P594), but investors with a longer-term, post-pandemic view may want to keep a watch on the stock for opportunities to buy it on dips or corrections in the market.