SHARES of Top Line Business Development Corp. (Topline) spiked week on week as the corporate acquired assets to support its expansion in Western Visayas, analysts said.
Data from the Philippine Stock Exchange (PSE) showed that Topline was the 11th most actively traded stock last week, with 330.9 million shares price a complete of P552.69 million changing hands as of Friday.
At the tip of the trading week, Topline closed at P1.54 per share, up 31.62% from the previous Friday’s close of P1.17. This increase significantly outpaced the weekly gains of the PSE index at 1.7% and the economic sector at 0.7%.
Since its initial public offering on April 8, the stock’s price per share has surged by 496.8% from its listing price of P0.31.
Unicapital Securities, Inc. Equity Research Analyst Peter Louise D.L. Garnace said the corporate’s recent acquisitions drove a rally in Topline’s stock price.
“Investors bet on a faster growth trajectory following the aggressive expansion into the fuel retail segment,” he added in an e-mail message.
Jeff Radley C. See, head trader at Mercantile Securities Corp., said in an e-mail that Topline’s recent acquisitions contributed to its emergence because the “darling” of the PSE for the week, with its stock trading at a record high.
On July 22, Topline disclosed the acquisition of a gasoline station in Consolacion, Cebu from Phoenix Petroleum Philippines, Inc. for P8.5 million.
The corporate said this was according to its ongoing expansion within the Visayas following its P180-million acquisition on July 8 of a gasoline station network comprising 38 gasoline stations and 15 fuel tanker trucks in Central Visayas and the Negros Island Region.
“This expansion has boosted optimism for the corporate’s earnings momentum because it cements Topline’s position within the Visayas region,” Mr. Garnace said.
Topline recently raised its year-end goal to 50 operational stations from its previous goal of 30.
It goals to grow its presence within the regional fuel market through further acquisitions and capability expansion.
Mr. Garnace said the rise in Topline’s share price may additionally be partly as a result of strong interest from retail investors driven by the stock’s consistent upward trend.
For the approaching trading periods, Mr. Garnace cautioned that a possible pullback in Topline’s stock price could occur as a result of overvaluation, as its high price-to-earnings ratio may signal an approaching correction.
“[Topline is] currently trading at a triple-digit price-to-earnings ratio, which is at a big premium to its peer’s single-digit price-to-earnings ratio,” he said.
Mr. Garnace said investors should monitor the corporate’s first-half earnings to evaluate whether its recent expansion within the Visayas has delivered improved financial performance.
For the primary quarter, Topline posted strong year-on-year growth in each gross revenue and net income, rising 36% (to P1 billion from P738.7 million last yr) and 38% (to P37.9 million from P27.5 million), respectively.
Mr. Garnace pegged immediate support and resistance levels at P1.50 and P1.85, respectively.
Then again, Mr. See placed support at P1.43 and resistance at P1.96. — Matthew Miguel L. Castillo