{"id":326174,"date":"2023-12-22T12:42:23","date_gmt":"2023-12-22T04:42:23","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326174"},"modified":"2023-12-22T12:42:25","modified_gmt":"2023-12-22T04:42:25","slug":"stock-in-focus-acen-corp-acen-22-dec-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-acen-corp-acen-22-dec-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: ACEN Corp. (ACEN) – 22 Dec 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>ACEN<\/td><\/tr>
Company Name<\/strong><\/td>ACEN Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>22 Dec 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 7.16<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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ACEN is currently trading at 2024 estimated Price-Earnings (P\/E) ratio of 12.8x, which is much lower than its frothy 20.9x 5-year average. It is also almost at par with the index\u2019s 11.1x estimated P\/E for the same period. Potential upside to consensus Target Price of P7.16 is a hefty 77.7%, but we maintain our HOLD rating on ACEN as we wait for the stock to stabilize and find a level where it will be deemed cheap enough for value investors. Nonetheless, it might be worth slowly accumulating the stock when it dips closer to the long-term support level between P3.30 and P3.00.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Candidate for worst performing index stock of the year? <\/h3>\n\n\n\n

ACEN is currently the worst-performing stock over the past 12 months, with hefty lead of 6.5% over CNVRG\u2019s -38.3% return. On a year-to-date basis, its -47.1% return is a close second to CNVRG\u2019s 50.6%. ACEN also has the 4th highest foreign outflow at P47.8-Million, ahead of URC, ICT, and RLC.<\/p>\n\n\n\n

Most unloved power genco<\/h3>\n\n\n\n

ACEN also earned the doubtful distinction of being the worst performing power company, trailing far behind its index peer MER and non-index peers AP and FGEN. It even performed worse than smaller cap RE platforms SPNEC and REDC, and had a 12-month return that is slightly worst than small-cap RE developer ALTER.<\/p>\n\n\n\n

Investors shaken by the wild ride<\/h3>\n\n\n\n

2022 was a year of high volatility and frothy valuations for ACEN. ACEN opened 2022 at P7.62 per share, swung between a high of P11.26 and a low of P5.51, before eventually closing the year at P10.74. Its P\/E ratio also made wild swings between a low of 31.8x and a high of 69.5x, while EV\/EBITDA reached a high of 53.8x and a low of 25.7x. The wild swings likely unnerved investors, and most have been shaken out by the volatility. The traumatizing volatility last year has likely led to ACEN\u2019s relentless downtrend in 2023.<\/p>\n\n\n\n

ACEN\u2019s true value still shrouded in the mists of time<\/h3>\n\n\n\n

As a power generation company with over 50% of its projects still under development and announcing new investments and acquisitions every couple of months, there is little clarity as to how much cash flows ACEN will eventually generate. It is also not a good look for the company to be in the building-up phase in an environment where development costs and financing costs are running high. <\/p>\n\n\n\n

As a result of development costs, the company\u2019s free cash flow is -53.3% of its revenues, a dismal performance against -13.3% of comparable RE developers. That being said, ACEN has disappointed analysts when it comes to costs and revenues in the past, resulting in estimates that is in constant flux and few analysts daring to initiate coverage on the stock. In fact, over the past month alone, 2023 consensus revenue estimates for ACEN has decreased by 23.2% to P41.9-Billion after factoring in recent results.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>