A Fundamental Analysis of Agribusiness Companies Listed in the Philippine Stock Exchange (2012-2016): Development of an Agribusiness Index

Date

5-2018

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Arlene C. Gutierrez

Committee Member

Normito R. Zapata, Jr., Jeanette Angeline B. Madamba, Loida E. Mojica

Abstract

With the shift of orientation of the Philippine economy from agricultural farming into a thriving agribusiness-driven sector, the country’s economic growth became robust in the past five years. This can be linked to the increasing importance of the agribusiness sector in the country, specifically in the financial market, as a catalyzing agent that drives local and foreign investments.

The rapid extension of investment in agribusiness is significantly evident throughout the years. This can be easily reflected by the number of publicly-listed agribusiness companies in the Philippine Stock Exchange (PSE) which almost doubled over the last decade and the new agribusiness stocks which started selling its shares to the investing public. Hence, this study analyzed 20 agribusiness companies in the last five years through fundamental analysis and constructed an index to highlight the sector in the financial market.

Through the fundamental analysis, agribusiness companies were individually analyzed based on its business model, products and services, risk and outlook, and management. The research found out that AgriNurture, Inc. (ANI) was the company with consistently decreasing financial performance and stock performance and had the lowest financial ratio among all other agribusiness companies listed in PSE. On the other hand, agribusiness companies under the sugar sub-sector such as Bogo-Medellin Milling Co. Inc., (BMM), Central Azucarera de Tarlac, Inc. (CAT), Roxas and Company, Inc. (RCI), and Victoria’s Milling Company, Inc. (VMC) dominated the financial and stock performance with favourable ratios and average daily growth rates.

Through cross-sectional analysis, it was found out that most of agribusiness companies employed a manufacturer business model which offers a wide array of products and service. In addition, most of the companies had a sound financial performance which reflected its increasing trend of share price.

Through Pearson correlation coefficient, this research found out that agribusinesses in the same sub-sector were highly correlated with each other in terms of its share price movement. On the other hand, the general trend of all agribusiness companies in PSE had insignificant share price correlation. Indeed, agribusiness stocks remained to be diverse in nature.

Moreover, an agribusiness index was constructed to further measure the performance of agribusiness companies. This research discerned that agribusinesses, in general, had a sideways trend in share price which nearly moved upward over the last five years. When compared its share price trend vis-à-vis the industrial index, which also comprises agribusiness companies, agribusiness index was not nearly reflected since its trend and movement deviated away from the existing index.

With the increasing importance of the agribusiness sector, such agribusiness index served its two-fold purpose of measuring the performance of agribusiness stocks and highlighting the sector in the financial market at the same time.

Language

English

LC Subject

Stock exchanges, Agricultural industries

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 Z36

Notes

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Document Type

Thesis

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