BLD Plantation – peak price that is not reflected in the ROE

[i4value]

I have concerns from both a fundamental perspective and share price perspective.

The company share price has been on an uptrend to reach a 10-year peak. But while its ROE was increasing from 2018, there was a decline last year. Is the market thinking that its ROE will eventually turnaround? Or have prices peaked?


From a fundamental angle, the company ROE is not as good as my 2 reference Bursa plantation companies – Boustead Plantation and KLK. This is not my pick from a fundamental perspective.

[donmihaihai]

So, when ROE goes negative, share price goes negative as well? If not, why should share price move along with ROE?

[i4value]

Fundamental investors believe that share price should eventually reflect the business performance. So as ROE uptrends so will the market price. If the ROE is down trending, you would expect the share price to down trend as well. If it does not, it may mean that the market thinks that the down trend is temporary. Alternatively, it time to get out as the share price will eventually turn down if the ROE down trend continues. I would take the discrepancy as a signal