One of the perks of investing regularly in the PSE market is by receiving passive income from stocks in terms of Dividends. Dividends are incentives given by the company to their shareholders. You don’t have to do anything but wait when they are going to announce and check for the income to be distributed in our accounts.
Below is a sample dividend given by DMC. I like stocks that gives regular dividends as it always feels that you are a part of the company, and they share the blessings that they have to us as an investor.
Recently I received the dividend worth 4,800 pesos. Net amount is 4,320php as there is a tax of 480php.
DMC is currently up by 20% from the time the dividends were declared. Consider also the short term drop in price as the market tries to priced in the outflow of funds from the company. If the stock is strong, it will recover in the future.
Not all Stocks provide dividends so select properly those that share their earnings to its investors.
Here’s the list of upcoming dividends for Philippine stock exchange stocks this September.
Company Name
Type of Security
Type of Dividend
Dividend Rate
Ex-Dividend Date
Del Monte Pacific Limited
DMPA2
Cash
US$ 0.325 per Series A-2 Preference Share
26-Sep-22
Jollibee Foods Corporation
JFCPB
Cash
Php10.60125 per share for Series B preferred shares
16-Sep-22
Jollibee Foods Corporation
JFCPA
Cash
Php8.20525 per share for Series A preferred shares
16-Sep-22
San Miguel Corporation
SMC2K
Cash
P0.84375/share
16-Sep-22
San Miguel Corporation
SMC2J
Cash
P0.890625/share
16-Sep-22
San Miguel Corporation
SMC2I
Cash
P1.18790625/share
16-Sep-22
San Miguel Corporation
SMC2H
Cash
P1.1854125/share
16-Sep-22
San Miguel Corporation
SMC2F
Cash
P1.27635/share
16-Sep-22
RFM Corporation
COMMON
Cash
Php0.059355
12-Sep-22
Shang Properties, Inc.
COMMON
Cash
P0.095000
12-Sep-22
Phoenix Petroleum Philippines, Inc.
PNX3B
Cash
Php2.0270
13-Sep-22
Remember that there are two types of dividends, first is the common or preferred dividends and stock dividends. As the name implies stock dividends are given in form of stocks while common or preferred dividends are given in terms of cash.
Don’t be confused which type you are receiving. I normally go for “common dividends” as opposed to preferred type of dividends. Common dividends are better if you want more liquidity on the stock, you are trading. Make sure to check this under “type of security” before buying.
Important dates for dividends include ex-date and payment date. If you want to avail the dividends, buy before the ex-date. You can sell the stock on ex-date and still receive the corresponding cash dividends on the payment date.
You probably have heard of numerous claims that people trading in the Penny stocks categories earned more money than those trading stocks with fundamentals or Blue chips stocks. It may be true as the penny stocks category provides high rewards as the prices can surge “normally” by 10% or more in just one day. But remember that with high reward expectations comes also with higher risks. It is true that volatility is high in penny stocks because they have mainly lower market capitalization or they have low public float of shares, but this volatility may happen in both direction.
In this article we will discuss the most traded penny stocks today in the Philippine Market
What are Penny stocks
If you are not new to the PSE market you can see from below snapshot that it’s a penny stocks day for this particular time. FFI, PHA,EVER, ZHI,PRIM, TECHW,BHI,LAND which are in this category upsurge in one day from 5% to 49%. What a move!.
For this discussion, we can classify penny stocks as those stocks that have low market capitalization in the range below 5Billion market capitalization. Investagrams provide this info on its website every time you search for a particular stock. You can see on the shaded “yellow” region of the snap shot. For this example PHA or Premier Horizon Alliance with a current price of 0.45pesos/share and a market cap of 2.33Billion.
How to Identify Penny Stocks
One of the ways I used to identify this if the market capitalization is the price of a stock normally is below 1 pesos. Some have slightly higher than 1 peso price per share but it is a good thumb rule to check out the market cap first before considering as a penny stock. For the below snap shot, Prime media holdings has 2.22 pesos/share price but if you look closely to its market cap it is just 1.56Billion.
Why people like to trade penny stocks
Earning quick money is one of the top reasons why traders buy and sell penny stocks. With the low price per share and possibility of accumulating stocks at their low prices is very attractive since you can buy more shares. When the prices move in accordance to your prediction, it can really give big profits in the short term. One of the most notable rallies experienced last time was during the Telco days where people speculate who will be the third telco during that time. NOW price during the 2018 timeframe sky rocketed by as much as 582% is just under a month of trading. Some really were able to ride the trend and became millionaires during this time.
The graph below shows this potential. Imagine investing 1,000 pesos this time would have made you more than 0.5 Million pesos in earnings.
Why trading penny stocks have high risk
Since trading has always two sides, if you are right with your prediction you can earn big in penny stocks, but if for some reason the market did not move with our expectation, the opposite can happen, you can loss a lot of money and could end up as a very big lesson for taking the risk especially if you could not manage your emotions.
The chart below shows what happen to NOW telecoms, after the speculations subsided, if you are able to buy on its peak at 20 pesos per share and not able to cut your losses early, you are possible to have taken a very big loss of more than 90%. Your account could suffer what most traders nightmare is, being wiped out. Imagine your hard earned money losing its value every day until there is almost nothing left.
Penny stocks have low trading volumes when speculations subside
As you know now, penny stocks have lower market capitalization thus it has a low trading volume. At times when speculations are finish, the stock tend to be illiquid and if you did accumulate a number of shares on a certain penny stocks, selling off this shares may be difficult. I have several experiences where the volume suddenly dried up so I cant sell most of my shares. Either you sell them at much much lower prices or you get “trapped” on these stocks. Hence the term “basura stocks” or “zubaru stocks” are coined with penny stocks as anytime you can stumble a gold mine or a bomb stock.
See sample video below of a trade I did on Penny Stocks
Penny stocks run the risk of Delisting or Prone to market manipulations.
There are several penny stocks in the PSE market that suddenly one day the trading was suspended by PSE regulators due to abnormality on tradings, not earnings (always negative earnings) and accounting issues. Most notable is Abra Mining where until now the stock is still not tradable after being suspended last March 2021.
Penny Stocks in the Philippine Market Below 1 Peso
Company
Code
Price
Haus Talk Inc.
HTI
1.04
CTS Global Equity Group
CTS
1.06
Alsons Consolidated Resources
ACR
0.91
Harbor Star Shipping Services
TUGS
1.28
PH Resorts Group Holdings
PHR
1.06
Nihao Mineral Resources International
NI
0.94
Solid Group, Inc.
SGI
0.86
Anglo Philippine Holdings
APO
0.73
Vulcan Industrial & Mining
VUL
1.04
A Brown Company
BRN
0.84
Italpinas Development Corp.
IDC
0.71
City & Land Developers
LAND
0.86
Ionics, Inc.
ION
0.6
Oriental Peninsula Res Group
ORE
0.73
Balai ni Fruitas
BALAI
0.8
Lorenzo Shipping Corp.
LSC
0.455
Cityland Development Corp.
CDC
0.68
Medilines Distributors Inc.
MEDIC
0.73
Vitarich Corp.
VITA
0.61
Cemex Holdings Philippines, Inc.
CHP
0.75
Alliance Select Foods International
FOOD
0.55
Figaro Coffee Group, Inc.
FCG
0.67
Roxas and Company, Inc.
RCI
0.6
SOCResources
SOC
0.5
Premium Leisure Corp.
PLC
0.46
Waterfront Philippines
WPI
0.5
Premiere Horizon Alliance Corp.
PHA
0.38
ATN Holdings
ATN
0.385
Century Properties Group
CPG
0.375
Basic Energy Corp.
BSC
0.365
Allday Marts
ALLDY
0.32
Ever-Gotesco Res. & Holdings
EVER
0.285
Xurpas
X
0.285
Transpacific Broadband Group
TBGI
0.28
Medco Holdings
MED
0.275
APC Group
APC
0.21
Empire East Land Holdings
ELI
0.193
Geograce Resources Philippines
GEO
0.185
MRC Allied
MRC
0.18
Lepanto Consolidated Mining
LC
0.132
Millennium Global Holdings
MG
0.113
Crown Equities
CEI
0.081
Boulevard Holdings
BHI
0.064
Apollo Global Capital
APL
0.038
Oriental Petroleum & Mineral
OPM
0.011
The Philodril Corp.
OV
0.0089
How to Trader and Mitigate the risk of Penny Stocks
Here’s the list of items you need to consider before going to penny stocks. These reminders are based on my experiences trading on the market. It may or may not be effective today as circumstances surrounding a penny stock change on a day to day basis.
1. Check the liquidity of the current stock you are trading, ask your self first if there is enough traders on the stock. Penny stocks can easily dry up in volume if there is no catalyst.
2. Allocate a certain tolerable amount to trade the stock. Remember we are not trading fundamental stocks at the moment so there is a chance that when the speculations stop, the volume will certainly dry out. Trade amount you can afford to lose, do not put all your capital in 1 stock
3. Set your take profits at stop loss areas. Once you enter a trade, you should have a plan when to enter and when to exit. No planning on this type of stocks will cost you a lot of money if you are not careful. Some brokers like 2tradeAsia have auto stop loss and take profits options where when the price is hit, the system of the broker will automatically execute the transactions.
For expectation purposes, the volatility can be +/-10% in just one day of trading so take this into consideration
4. Execute your trades according to your plan, there should not be a hesitation when applying what you have intended to do, always remember what happened to NOW telecons, it did happened and it will happen again.
DISCLAIMER: Links included in this description might be affiliate links. If you purchase a product or service with the links that I provide I may receive a small commission. There is no additional charge to you!
