Outlier

INTERNATIONAL Container Terminal Services, Inc.’s (ICTSI) stock price remained largely unchanged on a week-on-week basis but was among the most actively traded stocks during the period as both selling and buying pressures evened out.

Data from the Philippine Stock Exchange (PSE) showed ICTSI ranking eighth in value turnover with P876.42-million worth of 4.87 million shares having exchanged hands on the trading floor from Aug. 23 to 27.

ICTSI shares closed at P178 apiece on Friday, unchanged from the Aug. 20 close. For the year, the stock has gone up 41.3%.

The week started with the stock trading as high as P185.10 per share on Aug. 23 with 1.31 million shares worth P239.08 million exchanging hands, before returning to its opening price of P180 to close that day. The next day saw the stock’s highest value and volume turnover with P335.55 million and 1.88 million shares, respectively, but closed lower at P177.30 per share.

“The share has been on a sideways movement [last] week amid the presence of both selling and buying pressures,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in an e-mail.

“The stock’s steep rally for this year so far makes it susceptible to profit taking. This explains the selling pressure. At the same time, there is buying pressure with respect to the stock, a reflection of investors’ confidence towards its strong fundamentals, evident in its first-half financial results,” he added.

ICTSI reported a 98.2% increase in its attributable net income to $106.592 million in the second quarter from $53.78 million. This exceeded its attributable net income of $101.76 million for the entire 2020.

The second-quarter result brought attributable net income in the first half to $196.66 million, up 73.5% from $113.38 million in 2020’s comparable six months.

Meanwhile, ICTSI saw two developments last week that include the announcement of the company looking at business opportunities in the technology space and the launch of a new feeder service by its Argentine subsidiary TecPlata.

In an online forum organized by the Makati Business Club, ICTSI Executive Vice-President Christian Martin R. Gonzalez said the company is looking at opportunities in the technology space “at least at the terminal level.” He also noted that they are also looking at opportunities “vertically, within the logistics sector,” but noted they are careful not to compete with their customers in that regard. 

Meanwhile, ICTSI subsidiary TecPlata, which operates at the Port of La Plata in Argentina, is collaborating with Brazil’s Sta. Fe Port Administrative Entity to connect the latter’s port to the rest of Brazil and Asia via a new feeder service that would make a minimum of two calls per month using 500-TEU (twenty-foot equivalent unit) barges operated by service operator Newport Management.

“There are still room for questions with respect to ICTSI’s planned venture into the technology space. In what part of the technology segment will it specifically be? Will it complement its main operations? I believe investors are watching out for further details with respect to this plan,” Mr. Tantiangco said.

“As for the development with TecPlata, this is seen to somehow give boost to ICTSI’s financial performance. This is seen as positive for its investors,” he added.

In a separate e-mail, AAA Southeast Equities, Inc. Head of Research Christopher John A. Mangun considered these developments to be of little bearing to last week’s stock price movements.

“I think investors will wait for more developments on these tech-upgrades before factoring them in. The new feeder service in Argentina is a welcome development but it is also a non-event,” he said.

Asked for his net income forecasts. Mr. Mangun said it would depend largely on the results during the last six months of the year.

“[I]f everything goes well, we may see them post 10-15% higher revenues and earnings from its pre-pandemic 2019 levels,” he said.

For Philstocks’ Mr. Tantiangco, ICTSI may be able to keep its strong earnings growth momentum for the remainder of the year, given the global economy and international trade also recovers and that the company “would be able to maintain its cost efficiency.”

“Currently, ICTSI has an initial support seen at its 20-day exponential moving average (P176.71 as of Aug. 27), and a secondary support seen at the P175.00 level. Meanwhile, it has a resistance seen at 186.00,” he said.

“The COVID-19 pandemic is still seen as a significant risk to ICTSI. A resurgence of global cases may lead to the reimposition of lockdowns and consequently a weakening of economies around the world which is seen to negatively affect ICTSI’s operations,” he added.

Meanwhile, AAA Southeast Equities’ Mr. Mangun pegged support and resistance levels at P170 and P185, respectively.

“The stock is trading at near all-time high levels and is one of the best performers for the year due to the changes that its management made at the onset of the pandemic. I think most investors are already looking at this and if they are not, they should be,” Mr. Mangun said. — Abigail Marie P. Yraola