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PR Newswire
02-01-2025, 01:50 PM
Perstima returns over the past decade had been declining. Its 2024 and projected 2025 returns are negative. It falls into the Quicksand quadrant in the Fundamental Mapper.
![[Image: Perstim-FM-return.png]](https://i.postimg.cc/SK39R3W3/Perstim-FM-return.png)
Looking at this picture, you may think that there is no hope. But the Fundamental Mapper is based on trend projection. It would also not be realistic to simply project continuous declining returns. Management is not going to sit quietly without some turnaround plans.
In the case of Perstima, the performance over the past 2 years were dragged down by the start up of its new plant in Philippines. Furthermore the declining returns was because while there was revenue and profits growth, there was faster growth in capital as funds were needed for the Philippines expansion.
The future is not going to be the same as the past decade. As such I would expect a turnaround and a return to profitability in the not too distant future. Are you going to wait for this to happen before entering, or would it be better to enter now when the market has yet to recognize this turnaround potential?
Moral of the story? If you are prepared to dig into the details, you can find opportunities when all seem lost from an initial look.
Looking at this picture, you may think that there is no hope. But the Fundamental Mapper is based on trend projection. It would also not be realistic to simply project continuous declining returns. Management is not going to sit quietly without some turnaround plans.
In the case of Perstima, the performance over the past 2 years were dragged down by the start up of its new plant in Philippines. Furthermore the declining returns was because while there was revenue and profits growth, there was faster growth in capital as funds were needed for the Philippines expansion.
The future is not going to be the same as the past decade. As such I would expect a turnaround and a return to profitability in the not too distant future. Are you going to wait for this to happen before entering, or would it be better to enter now when the market has yet to recognize this turnaround potential?
Moral of the story? If you are prepared to dig into the details, you can find opportunities when all seem lost from an initial look.