^V^
Read carefully what he said esp this part :-
SR: But the higher earnings growth rate of growth stocks overcompensated for P/E compression, right?
VK: Not at all! Low-P/E stocks outperformed high-P/E stocks on a consistent basis throughout the 1966–1982 range-bound market.
***
He did not mention about "future earning " !
For a Low PE stock to roar , it is very much depend on its future earning, if its future earning stay flat n sustainable, u will hv mild return but definitely better than FD.
If its future earning grow i line with what u forecasted , u will hv fantastic return..that's for sure !
If what u forecasted gone holland ( earning turns into losses),
Low PE will also DIE ! (Example Megan !) but HIGH PE will die HARDER coz u bought at d peak !
Since both also die if its forecasted earning turn into negative , why should we pick high PE stock ?? think a little ..think ? u think u r playing US stocks ? u think u r buying coca cola or wallmart ? even wallmart selling at PE >50, is still not consider as value buy !
One classical example :- Gpacket
Those who bought at 4.50 based on rumours n speculation.
u r actually buying at PE of 44 (Damn bloody high )! as it can be seen, once his speculation call off n its latest earning came down, she drop like nobody biz to current level of 2.40 ! see how bad it was for buying high PE stock ?
Even u buy at 2.40, u r buying at PE 17 ! still not consider as low if u compare to masteel,liondiv n mahsing which giving u PE of 4+, 8+ n 9 + !
Is P N E not d key success ? need a second thought ?
5 comments:
Sam, needless to tell who is right & wrong, yr say before hand portfolio said it all.
keep up yr good job.
Yr supporter By passer^$^
G' day Sam,
From the few books I've read, you're spot-on on the combination of low P/E (comparitively to its sector) and expected growth.
I'm kind of a newbie in FA - basing most of my "analysis" on the data in:
1. Stock Performance Guide Malaysia by Dynaquest S/B - as a filter for good companies (ROEs, Shareholders' Equity growth, Earnings Growth, Low D/E, etc.)
2. Current prices for the companies filtered above.
As I'm a newbie at this, I'm wondering whether my "analysis" is "close to the money" and wondered, in your FA analysis & experience, whether the companies below are worth watching (and if not, help point out my errors - don't worry, shoot away, that's how I learn best :D):
a. APB (5568)
ROE Median, Shareholders' Equity growth, EPS Median Growth, Sales Median Growth - all 10+% to 20%
b. BPPLAS (5100)
ROE Median, Shareholders' Equity growth, EPS Median Growth, Sales Median Growth - all 21+% to 38+%
Currently down - contrarian value buy
c. DPS (7198)
ROE Median, Shareholders' Equity growth, EPS Median Growth, Sales Median Growth - all 15+% to 18+%
Currently down (though not as discounted as BPPLAS) - contrarian value buy
d. MAMEE (5282)
ROE Median, Shareholders' Equity growth, EPS Median Growth, Sales Median Growth - all 11+% to 18+%
Good yield at current price
e. PARAMOUNT (1724)
ROE Median, Shareholders' Equity growth, Sales Median Growth - all 14+% to 29+% BUT EPS Median Growth -11%
Currently down & good-ish dividend yield at current prices - contrarian value buy
f. SHELL (4324)
ROE Median, Shareholders' Equity growth, Sales Median Growth - all 16+% to 23+% BUT EPS Median Growth -1+%
Good yield at current price
g. SWEEJOO (5119)
ROE Median, Shareholders' Equity growth, EPS Median Growth, Sales Median Growth - all 20+% to 42+%. Good strike price around $1
h. TITAN (5163)
ROE Median, Shareholders' Equity growth, EPS Median Growth, Sales Median Growth - all 14+% to 37+%
Good strike price around $1.50
dear MK, see one thing in common ? d stocks listed by u r all stood at PE < 10, now u know how they pcik value stock ?
but i can tell u one thing, all d stocks that listed by u r not fund manager's favourite n some even control by its own boss ! u wont see rocket jump from them in bull run n u also wont see they jump from d sky in bear mkt.
all these r slow n steady FA counters, they will come up slowly but surely.
Paramout in property sector n APB in oil n gas sector, ther r one of d cheapest in its industry, somehow they just dont rose together with their peers.. ha ha too bad ^V^
G' afternoon Sam,
Domo arigato (TQ) for your quick pointers.
May I ask what info / stats to look out for (using FA) if we want a combination of solid companies with good potential upswings (other than my slow pokes filtered companies ;P)?
Or should we use a combo of FA to filter and TA to choose which to buy (based on market's psychology)?
Any more insights on GPACKET?
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