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PR Newswire
18-09-2016, 11:39 AM
http://www.reuters.com/article/us-asia-s...SKCN11M054
The Asia growth stocks index is now trading at 17.3 times 12-month forward earnings, compared with its historical average of 13.7, the most expensive since the global financial crisis in 2009.
While the high multiples are a salient feature of many growth stocks, whose earnings are expected to rise faster than their industry or market average, fund managers caution investors against overlooking value stocks that usually trade at a lower price than their fundamentals suggest they should.
Indeed, the value index is significantly cheaper, at 10.1 times earnings, below its average of 10.6 times. The broader MSCI Asia ex-Japan benchmark is trading at 12.7 times earnings.
Where does BWI stand relative to the big picture?
Current share price = SGD 1.60 (post-bonus)
Current share price = SGD 2.00 (pre-bonus)
1H2016 EPS = SGD 0.065 (pre-bonus)
FY2016 projected EPS = 2 x 1H2016 EPS = SGD 0.121 (pre-bonus)
Forward PE = 2.00 / 0.121 = 16.5
16.5 times is less than the Asia growth index earning multiple of 17.3
16.5 times is dirt cheap compared to 268 times (Ctrip.com)
16.5 times is more expensive than the value index (10.1 times).
Compared with the cheapest: Korea Electric Power (015760.KS), priced at 4.34 times earnings, and Chinese Chongqing Changan Automobile (200625.SZ), at 4.43 times, it is more expensive.
Taking into consideration the growth potential (especially from the China market), BWI could still be a relatively “cheaper” stock, if not the “cheapest”, as measured by PEG ratio.
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The Asia growth stocks index is now trading at 17.3 times 12-month forward earnings, compared with its historical average of 13.7, the most expensive since the global financial crisis in 2009.
While the high multiples are a salient feature of many growth stocks, whose earnings are expected to rise faster than their industry or market average, fund managers caution investors against overlooking value stocks that usually trade at a lower price than their fundamentals suggest they should.
Indeed, the value index is significantly cheaper, at 10.1 times earnings, below its average of 10.6 times. The broader MSCI Asia ex-Japan benchmark is trading at 12.7 times earnings.
Where does BWI stand relative to the big picture?
Current share price = SGD 1.60 (post-bonus)
Current share price = SGD 2.00 (pre-bonus)
1H2016 EPS = SGD 0.065 (pre-bonus)
FY2016 projected EPS = 2 x 1H2016 EPS = SGD 0.121 (pre-bonus)
Forward PE = 2.00 / 0.121 = 16.5
16.5 times is less than the Asia growth index earning multiple of 17.3
16.5 times is dirt cheap compared to 268 times (Ctrip.com)
16.5 times is more expensive than the value index (10.1 times).
Compared with the cheapest: Korea Electric Power (015760.KS), priced at 4.34 times earnings, and Chinese Chongqing Changan Automobile (200625.SZ), at 4.43 times, it is more expensive.
Taking into consideration the growth potential (especially from the China market), BWI could still be a relatively “cheaper” stock, if not the “cheapest”, as measured by PEG ratio.
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Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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