The stock price continues to kill in a few years, and 300 Taiwan stocks have fallen below the net purchase point value?
This year (2022) is a short year for investors: whether it is the stock market, the bond market or even the commodity market and foreign exchange market, investors should not be able to bargain. Especially in the stock market, because many technology stocks have experienced multiple rises in the past two years, but “how to rise and how to fall”, this wave of technology groups is also a group leading the decline. Many stocks have experienced corrections in their price-to-earnings ratios and stock price-to-book ratios, and have even experienced the dilemma of stock prices falling below net worth and stock price-to-book ratios falling below 1 .
How many stocks have lost their net worth? Even as the broader market rebounded from its low of 12,629 by more than 1,000 points, as of mid-November, there are still a whopping 291 stocks whose price per share is still below their net value per share.
Investors should be very curious, what stocks are listed below their net worth? Are these shares profitable companies? If the answer is yes, has their investment value already emerged? How should investors judge?
It is worth noting that a company whose share price is below its net worth is not as mismanaged as everyone imagines. Even many industry leaders have seen their share prices fall below their net worth this year. ‘year.For example, Leading downstream electronics Hon Hai (2317), laptop maker ASUS (2357), panel maker AUO (2409), and Pegatron (4938), Catcher (2474), Winbond (2344), Wistron (3231), etc. For electronic stocks, the price to book ratio is less than 1.
As for non-electronic stocks, there are Evergreen (2603), Yang Ming (2609) and Wan Hai (2615) in shipbuilding, Asia Cement (1102) in cement industry, TECO (1504) in electromechanical industry, and Taichung in the financial sector Silver (2812), Capital Bank (2809), Unified Certificate (2855), Antai Silver (2849) and so on.
The share price is lower than the net worth, and there are many leading companies with a market value of more than 100 million
These companies are all outstanding leaders and players in various sub-sectors. It is hard for investors to imagine that when Taiwan’s stock index is still above 10,000 points, there are still so many large companies whose stock prices are lower than their assets net. Are these companies operating companies, poor, unprofitable businesses?
Further observation, if you look at companies with a market capitalization of more than 100 billion yuan, Hon Hai, Sanxiong Shipping, ASUS, Pegatron, Asia Cement, AUO and Catcher have share prices lower than their net worth. Among them, Hon Hai’s earnings per share in each of the first three quarters of this year were more than 2 yuan, and the current net worth per share is 104.53 yuan. The recent share price is around around 100 yuan, slightly lower than the net value.
Evergreen has benefited from the booming marine industry over the past two years, and almost every quarter has double-digit EPS. At the end of the third quarter of this year, Evergreen’s net worth per share was 254.87 yuan, but the recent share price is only about 150 yuan; Yang Ming, which is also a shipping indicator, had a net worth per share of 94.82 yuan at the end of the third quarter, but its share price was only about 65 yuan . seeing as the share prices of the two container shipping companies are only about 2/3 of their net worth; Wan Hai, which mainly engages in short sea routes, had a net worth per share of 83.31 yuan at the end of the third quarter, and its share price was only in the 7 prefix, which is also significantly lower than its net value.
From the above examples, we can see that many companies whose share price is lower than their net worth are actually well-known industry leaders, and these companies are not making any money, or even the opposite. For example, the shipping industry is still a good year this year The market even spread the news that the year-end bonus may be higher than last year, which made many people envy.
Looking back at one of the things investors are most concerned about, since most people aren’t in the shipping business and have generous year-end bonuses to look forward to, can they make a lot of money investing in these companies? Or earning your “year-end bonus” through stocks whose share prices corrected over a period of time or even fell below their net worth?
The answer is that it depends. because? Senior shareholders with more experience in the market should be able to understand that investing in stocks does not appear to be a guarantee of income if they invest in stocks only from a fundamental, technical, trading point of view and economics perspective. general.
Let’s take shipping actions for example. Investors see that these companies have also made a lot of money in the last couple of years. Why was there a wave of super high market prices last year, but this year ushered in a wave of “down” market prices that were very correct? Taking Yang Ming, who has the official stock color, as an example, Yang Ming’s financial report has been released: in the first three quarters of last year, Yang Ming’s basic earnings per share was 32.73 yuan, while in the first three quarters of this year, Yang Ming’s earnings per share reached 47.5 yuan, which is equivalent to growth of nearly 50%.
Just looking at the numbers, Yang Ming not only earned a lot of money, but also increased his profits compared to last year. Unexpectedly, after the super market soared several times in the first half of last year, the stock price started to weaken the second half of the year, and this year, the share price has even halved.
Business cycle stocks are easy to change color of pigs and sheep, don’t be “the last rat”
From the above observations, we can draw a conclusion: the ratio of stock price to book value of stocks fluctuates greatly with business cycles. In the first half of the economic recovery, the increase in stock prices exceeds the increase in equity. Then there is a guarantee of the box office, the share price not only stopped rising, but fell altogether.
Returning to Yang Ming’s example, Yang Ming’s share price peaked at 234.5 yuan in July last year, while the net worth per share at the end of last year’s second quarter was less than 30 yuan. at that time it was about 8 times high. The price to book ratio is also less than 1, which shows the ups and downs of economic cyclical stocks.
After reading Yangming’s example, investors should be able to understand the ups and downs of the sea of stocks to some extent, and should pay attention to the “dangerousness” of walruses, and should not blindly follow in a swarm of people, but eventually become “the last rat”. However, not all stocks are in such a cyclical industry with such drastic changes. When investors judge whether the buying point of investment value has emerged, they can effectively lock in stable companies with less fluctuations in profits (and of course less fluctuations in stock prices), such as the aforementioned Hon Hai, Pegatron, etc., cut into batches when the stock price reached a relatively low level.
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(Image: shutterstock, for illustration purposes only / The content of this article is for guidance only, not investment advice, please be cautious before investing)
