Andrew Tan-led Alliance Global, Inc. or AGI in the Philippine Stock Exchange made some headway late last year when it announced its purchase of Fil-Estate Land (LND). Alliance Global, Inc., as we know is involved in three core businesses – real estate through Megaworld Corporation; food and beverage through Emperador Distillers, Inc.; and fast food through Golden Arches Development Corporation which is the master franchise holder of McDonald’s in the Philippines. The company also has a 50% stake in Travellers International which is the one that developed Resorts World Manila. December’s purchase of Fil-Estate Land only adds to AGI’s portfolio of prime companies.However, for 2011, it is its stake in Travellers International that is seen by many analysts to bring the bulk of profit to company. In fact, Travellers in is estimated to contribute around PHP 7 billion of the total expected PHP 13 billion plus net profit at the end of the year.
On the technical side, 2010 was a year to remember for AGI as it rose from an opening of PHP 4.10 in January all the way the way to a high of PHP 13.12 in December 6 before closing the year at PHP 12.50. Now, that’s a gain of about 204.5% in just a year! You would not get that from any kind of bank, trust or mutual fund products. Anyway, as you can see from its chart above, AGI’s breakout from an inverted head and shoulders pattern during the first part of 2010 propelled it towards its December high.Though after peaking at PHP 13.12, it appears that it has lost some of its upward momentum. From December to present, AGI has remained out of the radar by consolidating within a symmetrical triangle. For those who do not know, a symmetrical triangle which comes from an uptrend gives the stock an upward bias. Given this, a breakout to the upside could send AGI at least around PHP 15.18 (measured by projecting the base of the triangle from the likely point of breakout) in the medium term. A fall below the triangle’s support, on the other hand, could send it down to just below PHP 8.00. This could happen if the PSEi breaks down (it is dangerously hanging over a major support) as this could heavily weigh on the stock. Thereby, it’s more prudent for you to wait for the index to rebound and the stock to breakout before going long on AGI.