Before i start engaging an exchange of views/opinions with respect, as second nature of engineer
, we like to make definition of terminologies to ease communication.
Over-value : A stock with a current price that is not justified by its earnings outlook or price/earnings (P/E) ratio.
It is by no mean to conclude a stock is mismanaged or struggled
With your links, i read the postings. I am understood now the reasons CheungWoh performance been depressed.
"The four-pronged "perfect storm" of i) Thailand's floods + ii) the Japanese Tsunami + iii) the high profile Bankruptcy of a key high volume customer (Solyndra) + iv) (accounting) FE losses arising during the drawn-out Chinese approval process of Cheung Woh's Tysan portfolio action."
(08-06-2012, 05:47 PM)RBM Wrote: ...
a) the recent (proposed) dividend announcement, i.e. including special dividend arising from last (financial) year's Chinese portfolio action, corresponds to a dividend yield exceeding 7% at the current share price. Hardly the pay-out of a struggling over valued company!
b) the confidence that Cheung Woh's BoD has demonstrated in the company's prospects by virtue of its sustained high volume share buy-back campaign - amongst other positive outcomes of this is the "effective floor" (at S$ 0.18 per share) that has been put under Cheung Woh's share price.
As my definition, i am not in doubt the management is trying to recover its biz and investor's trust. This is not within the context of our exchanges of views/opinions
Let's put up my view on CheungWoh in more detail
- The current PE is about 100. There is no doubt that Mr Market is paying CheungWoh with substantial hope on its recovering. In other words, the benefit of the recovering is already priced in.
- Hope remain as a hope, till the day it is fulfilled. Margin of safety is necessary to invest
With the above reasons, IMO CheungWoh is over-value to go in now with its current PE. Although i am sure CheungWoh will survive with its low long-term debt and current cash holding