SMPH (SM Prime Holdings, Inc.) just became the first one to hit the 1 Trillion pesos Market Valuation in the Philippines on June 5. I’m here to share with you why you should invest SMPH stocks. If this giant company hit its trillion cap (I repeat, in Trillion), what does it say about you as an investor and your future investments with SMPH? Read on…
SMPH Hit 1 Trillion Capitalization! Why Does It Matter?
Now that SMPH hit 1 Trillion cap, what does it say about the company and you as an investor? Why huge market cap matters?
Market Cap is simply the market value of a company in the stock market. The larger the market cap, the larger the company’s asset, revenue and capital. However, it does not necessarily mean the company is better than the other companies in the market.
Perhaps you’re wondering why SMPH stock price is only around 34 while having a close-to-trillion cap, does that mean it’s cheaper than other companies like AC whose stock price is around 840? Lower stock price does not indicate cheaper value per se.
Market cap is the total number of outstanding shares multiplied by the value of one single stock. SMPH’s stock price is lower because it has more shares outstanding than AC.
Having a large market cap is beneficial because investors tend to be more confident to invest. Large market cap companies are known to be less volatile. Stability is their home. The downside of having a huge market capitalization though is usually the slow paced of growth. But investors like it slowly but surely. They win in the end, that is what always matters.
SMPH is one of my favorite property giant companies in the Philippines. Not only it makes excellent recurring income, SMPH is also one of the premium stocks we recommend here as one of our blue-chip stock picks. I’m gonna lay out the cards here as to the reasons why you should invest in this powerhouse.
Why You Should Invest SMPH Stocks
Recurring Income
SMPH is currently the biggest shopping center developer and mall operator not only in the Philippines but also in South East Asia. How many SM malls have you been to? According to their corporate profile, it has 61 malls in and outside Metro Manila and 7 shopping in malls in China, totaling 9.0 million square meters of Gross Floor Area (GFA). In the Philippines, they have a total of 17,076 tenants and 1,635 tenants in China. Just imagine the recurring rental revenue SMPH makes every month from these malls alone.
SMPH reported a net income growth of 13% this First Quarter of 2017, to PHP6.6 billion from PHP5.8 billion last year. 62% of the revenue was from malls, 29% from residences, 4% from commercial properties and 5% was from hotels and convention centers.
Long Term Growth
SMPH is not only into mall development, it also operates and develops the following:
Residences:
SMDC properties
Hamilo Coast
Tagaytay Highlands
Commercial Offices:
SM Makati Cyber One
SM Makati Cyber Two
Cyber West
TwoE-com Center
ThreeE-com Center
FourE-com Center
FiveE-com Center
Hotels and Convention Centers:
Conrad Manila
Park Inn by Radisson in Clark, Pampanga
Park Inn by Radisson in Davao
Pico Sands Hotel in Hamilo Coast
Radisson Blu Hotel in Cebu
Taal Vista Hotel in Tagaytay
SMX Convention Center (Manila, Taguig, Davao and Bacolod)
Best Equity
You probably know this already, SMPH is among the top 30 companies joining the PSE Index. Why that matters? Read the article I wrote about PSEI Companies. If you’re looking for an equity with immense potential, SMPH is one of those you should have shares with. Even the most excellent financial houses of Mutual Funds and UITFs allocate their investments for SMPH. See some portfolio allocation below from the best Equity Funds and Equity Index Funds in the market. SMPH is always one of the their top holdings.
Outstanding Management
No doubt about the exceptional management of the Sy family and the SM Group. SMPH remains its focus on their success-driven management strategies. SMPH makes every Filipino proud not just from winning prestigious awards but also for giving the Philippines a world-class brand recognition.
Generous Dividends
A huge and stable company like SMPH always rewards cash dividends every year. From my observation, they always declare them every April of each year. So keep them shares coming to enjoy more dividends.
Passive Income Potential
SMPH was incorporated in 1994. SMPH IPO price (Initial Public Offering) at the time was at P2.0669 per share. As I write this post, the value of SMPH per share is now P34.05. For instance, if your Mom bought you 10,000 shares on the IPO back in 1994 and you kept your shares until now, your 10,000 shares would now be valued at 340,500. You gained 1547% without much effort. That is passive income!
Income potential of a brilliant property company like SMPH could grow your money amazingly because properties and lands grow in value over time.
My Strategy Investing SMPH Stocks
Wondering how I invest SMPH stocks and what’s my strategy for it? Currently, SMPH is one of the blue-chip companies that I invest every month. I usually buy 100 shares of SMPH monthly and then 200 or 300 shares when the market is down or when the stocks are fair or cheap to buy or when SMPH is included on the Undervalued Stock picks. I follow the stock picks data here in Dailypik to decide when I should add more shares to buy for a stock like SMPH.
Since SMPH is more on real estate and properties, I know it will really take a couple of years or more for the stock price to climb the charts further. My goal for my SMPH stocks is to remain invested until 10 years. For now, I am focused on growing my business and traveling some countries I want to visit. Hey, follow me on Instagram and DM me if you want to be my next travel buddy 🙂
Are you also an investor of SMPH? Share your views in the comments. I’d like to hear from you 🙂
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Hi! San Miguel has an FOO on their FB at 85 per share with a minimum of 500 shares…I’m not really knowledgable about this kind of stuff but do you think this is a good investment? Thanks!
I regret the day I chose EDC over SMPH.
Hi, Diana. SMPH is one of my priorities in line with BDO. I made sure I never forget to buy shares monthly so I set up EIP for it. Happy Holidays! 🙂
Hi Ms Fehl, I am unable to decide whether to buy WLCON, I regretted that I did not buy stocks prior to opening stocks to the public.
Hi Ms. Fhel! Which one is better? ALI or SMPH? 🙂 i want to buy both however I can only afford one for now 🙂
Hi Fehl, any thoughts about CLI
Hi Fehl! When I started investing in stocks in 2015, I was choosing between ALI and SMPH, I finally settled for the former. Back then, ALI was around PhP 36ish and SMPH was trading at PhP 20. Now, I somewhat regret not buying SMPH. I want to ask your opinion if I should start buying SMPH or just continue adding ALI stocks. I really appreciate your insights. Thanks!
very helpful info Fehl, will continue to invest under smph. I got it back when the price per share was 15.50, very happy with the results 🙂 no plans of letting go if this stock as you have mentioned on your article it is better to hold on to this for at least 10 years or so. PCA and averaging down is my strategy for this stock. 🙂
Hi! Yeah me too, not letting go of my SMPH shares for now. I think we’ll be in a relationship until 10 years LOL 🙂
cheers to 10 years! haha! 🙂
Hi Fehl, currently SMPH is not on your undervalued, and above BBP na sya sa Blue Chips, will you still recommend this for long term? Thanks.
Hi Sara. Like I mentioned from the article above, SMPH is one of those stocks I invest for long term using PCA method so my strategy is basically buy monthly whatever the price is. If the price falls below BBP, then I add more shares to buy (200 or 300 shares). If it’s below BBP, the I stick with 100 shares. Cheers!
Thank you!!! 🙂
Hi Fehl. Just want to know your thoughts for SSI. Is it going to be still bullish for the coming weeks and can it breakout price of 4.7 above? Thanks
If you have plenty of gains, sell it na 🙂 It’s still up to you though 🙂
Thanks Ms. Fehl. Glad you replied. This blog really helped me a lot and is the reason why I started trading since 2015. 🙂
Btw, What average percentage gain should you recommend for a particular stock to be acceptable for a sell? Well, in this case for SSI. I held this stock for almost 2 bloody years waiting for it to bounce back and now it’s happening. :’)
When the market goes crazy and idle to move up that’s what happens – stocks so slow to hit the TP. But when that happens, OMG 🙂 You gotta sell na or lock in your gains 🙂
Hi,Fehl. Thank you for the informative article. SMPH is still above TP. Does your article mean that the BBP and TP for SMPH will be upgraded soon?
I always update the data of stock picks here whenever there are new adjustments so you guys better check them out every day or whenever you are investing. Cheers!
Thank you, Fehl!
Yes fehl, I’m happy with smph, I have an average price of P19.96 resulting to 65.02% gain. Currently I hold it following your bbp of P25.00. Thank you fehl.
Yay! That’s nice, Jasper 🙂
Hi Fehl,
When you say it is cheap or fair value is that below target price or the buy below price?
Thank you for sharing your knowledge always. God bless you more!
Hi, Jenny 🙂 It’s cheap when it’s usually below the buy below price. God bless you, too!
Will definitely consider buying smph next week. Thanks maam fehl!
You’re recommending SMPH. But why its not included in our Magic 10. Anyway I will buy SMPH for the ITF of my daughter. Thanks for the information Fehl and more power.
Hi, Ben! It is included on the Best Blue-Chip Stocks we recommend, did you check it? 🙂
Thx ma’m. Ingatz n godblez
Always my pleasure 🙂