Monde is thought to be a strong long-term investment
6 June 2022
On increasing commodity prices, listed business Monde Nissin Corp. had its shares end last week’s trading down 13% week-on-week, or from P16.68 to P14.50.
Monde’s stock, on the other hand, remains a good long-term investment.
Monde’s highest closing price was P20.25 on September 27, 2021, and its lowest closing price was P12.70 on April 13, 2022. The company’s net income for the previous three years was P6.65 billion in 2019, P8.07 billion in 2020, and P3.25 billion in 2021. On June 1, 2021, Monde was listed on the Philippine Stock Exchange, raising a record P48.6 billion.
“Overseas factors, such as rising commodity prices, particularly those parts of Monde’s raw materials like wheat, dragged investors’ sentiment toward Monde because higher prices may have a significant impact on the company’s margins, resulting in a lower bottom line,” said Philstocks Financial Inc. research associate Claire Alviar.
“Moreover, rising inflation at home may have a negative impact on consumption by lowering purchasing power, resulting in reduced revenues and net income due to increased costs,” she noted.
Despite these issues, experts believe Monde is still an excellent long-term investment.
“Monde remains a good investment because it is one of the country’s most well-known brands, and the Philippines is still a consumption-driven economy, so consumer stocks are expected to have good prospects,” Alviar explained. “However, for now, it would only be good for the long-term, and strategically buying on dips is recommended because the short- to medium-term outlook is clouded by risks.”
She also mentioned that due to MSCI’s rebalancing, Monde became one of the most active companies in the most recent trading week.
“Those funds following the MSCI have added shares of Monde,” Alviar explained. “It was observed on March 31, 2022 when Monde had a significant volume of roughly 204 million, far greater than the 30 million 10-day normal, and it also had a net foreign purchase of P58.5 million.”
Monde’s stock has a score of 14, which suggests it is neither oversold nor overbought, but it is towards the oversold level or below 30. A technical rebound of the stock is also feasible after a week of loss.
