{"id":327567,"date":"2024-04-17T22:15:12","date_gmt":"2024-04-17T14:15:12","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327567"},"modified":"2024-04-17T22:38:22","modified_gmt":"2024-04-17T14:38:22","slug":"stock-in-focus-wilcon-depot-wlcon-17-apr-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-wilcon-depot-wlcon-17-apr-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Wilcon Depot (WLCON) – 17 Apr 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>WLCON<\/td><\/tr>
Company Name<\/strong><\/td>Wilcon Depot Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>17 Apr 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 26.52<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

All of the past negatives have already been priced in as evidenced by WLCON\u2019s trailing 12-months P\/E of 19.8x which is essentially at -2Sds below its historical mean. Factoring in analysts\u2019 expectations of EPS growth and the consensus Target Price (TP), WLCON should actually be trading at a P\/E of 26.3x, significantly higher than the 16.5x forward P\/E that the market is currently attributing to the stock.
Given the dirt-cheap valuations, we therefore recommend a BUY on WLCON and advise investors to slowly start scooping up shares.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

Housing demand starts to claw back from beyond the grave<\/h3>\n\n\n\n

Demand in the battered and bruised housing sector has started to show some signs of life lately. While the actual number of homes that were constructed in Q1 (based on approved building permits figures) was still weak, consumer sentiment towards home buying has notably been gaining traction. <\/p>\n\n\n\n

According to the consumer expectations survey, the percentage of households that considered Q1 as a good time to buy a home came in at 25.1%, 6.2ppts higher than the prior quarter\u2019s level and 5.6ppts above last year\u2019s mark. While this is still comparably low relative to pre-pandemic numbers, we note that the current percentage is actually the highest it has been in the last 15 quarters. <\/p>\n\n\n\n

While there is no guarantee that the more positive outlook will come to fruition, the data definitely sets a more positive tone for a sector whereinconsumers have been beleaguered by interest rate uncertainty and high inflation.<\/p>\n\n\n\n

What is dead may never die<\/h3>\n\n\n\n

For most of the prior year, home improvement retailer WLCON essentially became investors\u2019 personal punching bag as its share price took a dive to the Marianas Trench. At this point, any good news such as the turnaround in housing sentiment would be most welcome for the stock.<\/p>\n\n\n\n

Fundamentally, we note that WLCON primarily deals in the finishing stages of home construction and given that a typical two-storey house usually takes around 6 months of construction time, expansions in the pipeline of new homes may be felt in WLCON\u2019s results come Q3. <\/p>\n\n\n\n

With the signs now pointing to a more positive direction for housing demand, we feel that now would be an opportune time to slowly begin accumulating on the stock.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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