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Blue Chips

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Submitted By vodka023
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What are Blue Chips?
Blue Chips are stocks of well-established companies with strong track records. When we refer to blue chips they are often known companies in the country. They are somewhat treated as icons in their respective industries.
In terms of financial resources, blue chip companies are known to have large amount of capital. They are known to be profitable, pays regular dividends to its stock holders, and have a good rating on their debts.

Image taken from oldvegaschips.com
How’s the Performance of Blue Chips?
Let’s take one blue chip stock for example. Jollibee Foods Corporation (JFC) has been a great performer in the Philippine Stock Market during the last decade. As you can see in the chart below, the direction of its price is generally upward.
JFC is the parent of Jollibee, the country’s leading fast-food chain brand. And if you would add all Chowking, Greenwich Pizza, Red Ribbon, Mang Inasal and Burger King stores it will total to 2,510 food-chains worldwide and a total sales of 82.1 billion pesos (around 2 billion US Dollars).

Generated from http://investing.businessweek.com
Is it Safe to Invest in a Blue Chips Stocks?
All stock market investments has no guarantee of earning you money. Stocks investment is always involved with high risks. The market can go very high but sometimes it can go crashing down. If you plan to do short-term investment only, then I might say that blue chip stocks are not really the best choice. But, is it safe to invest in blue chips? Well, if you compare them to non-blue chip companies, then I will say Yes since they have already proven to be strong over the years so we don’t expect them to be gone any time soon.
What Companies are considered as Blue Chips in the Philippines?
Some companies that are considered as ‘blue chips’ are Jollibee Foods Corporation (JFC), Philippine Long Distance Company (TEL:PM), Metropolitan Bank and Trust (MBT), Ayala Land Inc., (INC) and Bank of the Philippine Island (BPI:PM).
So in summary, Blue Chip companies are considered good investments as they already have proven track record in terms of performance, they have a big amount of capital, they pay dividends to their shareholders and compared to other volatile stocks in the market, it is safer to invest in blue chips. But remember, these stocks are ideal for long-term investments. Happy Investing!

MANILA, Philippines—The local stocks index gained for a second session on Monday on selective buying of blue chips like SM Investments Corp. while more investors focused on penny stocks.
The main-share Philippine Stock Exchange index added 13.5 points, or 0.25 percent, to close at 5,383.22. Across the region, sentiment was mixed ahead of the third-quarter corporate earnings reporting season.
Value turnover amounted to P9.1 billion but excluding block transactions, turnover stood at P5.43 billion. There were 94 advancers versus 70 decliners while 43 stocks were unchanged.
SM (+3.9 percent), URC (+2.14 percent), RLC (+2.03 percent), Megaworld (+1.71 percent), BPI (+1.22 percent) and Metrobank (+1.05 percent) led the index higher. EDC, AGI and Philex also contributed to the day’s gains.
In the case of SM, tycoon Henry Sy’s conglomerate is among the beneficiaries of a consumer theme in the stock market. In a recent report, Citigroup upgraded its target price on SM from P785 to P915 per share.
But most of the trades in the market were focused on penny stocks like APM (+28 percent), EG (+48.48 percent) and Greenergy (+10.53 percent). Second-liner Bloomberry (+4.55 percent), which will be the first to open an integrated gaming facility in Pagcor City, also continued to gain.
APM, whose shares have sizzled in the last two weeks, was the day’s most actively traded stock. The company mandated Evercore Partners as financial adviser “to study and explore capital market and corporate structure options.”
On the other hand, there was profit-taking on other blue chips like AC (+1.84 percent), PLDT (+0.96 percent), SM Prime (-0.28 percent), Globe (-0.35 percent) and ICTSI (-3.98 percent). Security Bank, though not part of PSEi, also faltered.
Metrobank said local equities were expected to experience some technical rebound from last week’s slump. “However, the market is generally expected to trade sideways ahead of China’s third-quarter GDP figure to be released this Thursday. While caution is warranted, buying on dips is preferred, positioning ahead of third-quarter corporate earnings results,” Metrobank said.

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