Valuation Ratio – Regiofora http://regiofora.com/ Tue, 22 Nov 2022 05:07:25 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://regiofora.com/wp-content/uploads/2021/07/icon-5-150x150.png Valuation Ratio – Regiofora http://regiofora.com/ 32 32 When should you buy bet-at-home.com AG (ETR:ACX)? https://regiofora.com/when-should-you-buy-bet-at-home-com-ag-etracx/ Tue, 22 Nov 2022 05:07:25 +0000 https://regiofora.com/when-should-you-buy-bet-at-home-com-ag-etracx/ bet-at-home.com SA (ETR:ACX), may not be a large-cap stock, but it has seen a significant rise in share price of more than 20% in the past two months on XTRA. As a small-cap stock, barely covered by analysts, there’s usually more opportunity for mispricing because there’s less activity to bring the stock closer to its […]]]>

bet-at-home.com SA (ETR:ACX), may not be a large-cap stock, but it has seen a significant rise in share price of more than 20% in the past two months on XTRA. As a small-cap stock, barely covered by analysts, there’s usually more opportunity for mispricing because there’s less activity to bring the stock closer to its fair value. Is there still a possibility here to buy? Let’s take a closer look at bet-at-home.com’s valuation and outlook to determine if there is still an opportunity to trade.

Check opportunities and risks within the DE hospitality industry.

Is bet-at-home.com always cheap?

Good news for investors – bet-at-home.com is still trading at a fairly cheap price according to my multiple price model, where I compare the company’s price-earnings ratio to the industry average. I used the price/earnings ratio in this case because there is not enough visibility to predict its cash flow. The stock’s ratio of 4.88x is currently well below the industry average of 22.79x, meaning it is trading at a cheaper price compared to its peers. What’s more interesting is that the bet-at-home.com stock price is quite volatile, giving us more of a chance to buy since the stock price could go down (or up) in the future. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What does the future of bet-at-home.com look like?

XTRA: ACX Earnings and Revenue Growth November 22, 2022

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Although value investors argue that it is intrinsic value relative to price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. However, with extremely negative double-digit earnings change expected over the next two years, near-term growth is certainly not a buy decision driver. It looks like a lot of uncertainty is on the cards for bet-at-home.com, at least for the foreseeable future.

What this means for you

Are you a shareholder? Although ACX is currently trading below the industry PE ratio, the negative earnings outlook brings some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio’s exposure to ACX or whether diversifying into another stock might be a better decision for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on ACX for a while, but are hesitant to take the plunge, I’d recommend doing some more in-depth research on the stock. Given its current price multiple, now is the perfect time to make a decision. But keep in mind the risks that come with a negative growth outlook going forward.

So while the quality of earnings is important, it is equally important to consider the risks that bet-at-home.com faces at this stage. Our analysis shows 3 warning signs for bet-at-home.com (2 are not very good with us!) and we strongly recommend that you consult them before investing.

If you are no longer interested in bet-at-home.com, you can use our free platform to see our list of more 50 other stocks with high growth potential.

Valuation is complex, but we help make it simple.

Find out if paris-à-maison.com is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Ally Financial: For Dividend Growth Investors with a Higher Risk Appetite (NYSE: ALLY) https://regiofora.com/ally-financial-for-dividend-growth-investors-with-a-higher-risk-appetite-nyse-ally/ Sat, 19 Nov 2022 18:22:00 +0000 https://regiofora.com/ally-financial-for-dividend-growth-investors-with-a-higher-risk-appetite-nyse-ally/ ipopba Introduction As a dividend growth investor, I am constantly looking for income producing investments to supplement my passive income. Most of the time, I add to existing posts that I find appealing. On other occasions, I start a new position to further diversify my portfolio, increase my revenues and gain exposure to new segments. […]]]>

ipopba

Introduction

As a dividend growth investor, I am constantly looking for income producing investments to supplement my passive income. Most of the time, I add to existing posts that I find appealing. On other occasions, I start a new position to further diversify my portfolio, increase my revenues and gain exposure to new segments. Current market volatility may provide an opportunity to acquire future revenue at lower prices.

My dividend growth portfolio lacks exposure to two main sectors: financial services and information technology. Therefore, I will analyze more companies in these two sectors, as they have both suffered from the current downturn. I own banks, insurers and asset managers in the financial sector. I will analyze a digital bank, Ally Financial (New York stock market :ALLY), in this article.

I will analyze the company using my dividend growth stock analysis methodology. I use the same method to make it easier to compare searched companies. I will examine the fundamentals, valuation, growth opportunities and risks of the business. I will then try to determine if it is a good investment.

Seeking Alpha’s business overview shows that:

Ally Financial, a digital financial services company, provides various digital financial products and services to consumers, businesses and enterprises primarily in the United States and Canada. It operates through four segments: Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations and Corporate Finance Operations.

Fundamentals

Ally Financial’s sales have grown more than 50% over the past decade. Most of the sales come from its financing operations. The low interest rate environment over the past decade and the growing need for financing new purchases from the public have supported the company’s growth model. Looking ahead, analyst consensus, as seen on Seeking Alpha, expects Ally Financial to continue to grow sales at an annual rate of 2.5% over the medium term as it faces to slower growth due to higher rates.

Chart
Data by Y-Charts

EPS (earnings per share) grew much faster during this decade. EPS nearly quadrupled in that decade because the company could raise funds more cheaply, offer low interest rates on deposits, and earn a high margin on its loans. Fewer shares, higher sales and higher margins led to rapid growth. Going forward, analyst consensus, as seen on Seeking Alpha, expects Ally Financial to suffer from lower EPS before leveling off in 2024 as the company faces higher rates. high and possibly a recession with higher loads. Even in this scenario, projected EPS for 2023 of $4.49 will be higher than 2019 and 2020 EPS.

Chart
Data by Y-Charts

Ally Financial is a new dividend payer. He does not have a long track record as he has only increased his payments for five consecutive years. However, the payout seems relatively safe, with a payout rate of 24%. Additionally, the dividend yield is attractive due to the current extremely low valuation, and investors can enjoy a 4.61% yield. However, due to the current business environment and rising rates, investors should expect modest increases in dividends as the company strives to preserve more capital than regulatory requirements.

Chart
Data by Y-Charts

Another form of returning capital to shareholders is through share buybacks. Over the past five years, Ally Financial has repurchased over 30% of its outstanding shares. Buyouts support EPS growth and are very effective as the business grows as they unlock even faster growth resulting in higher dividend growth. If the company trades for such a valuation, buybacks will be very effective.

Chart
Data by Y-Charts

Evaluation

The P/B ratio (price to book value) has decreased significantly over the last twelve months. At the start of the year, Ally Financial shares were trading at roughly their book value. However, as we have seen interest rates rise and recession risk increase, valuations have contracted. The shares are trading at a nearly 25% discount to book value. Investors are expecting tough times ahead, and so there is a discount.

Chart
Data by Y-Charts

Looking at the chart below from Fastgraphs, we see that Ally Financial is priced attractively compared to its past valuation. Since the IPO in 2014, the average P/E ratio is 9.5, and the current P/E ratio is more than 50% lower at 4.1. Therefore, a significant discount stems from investor concern about its performance during the recession and high interest rates.

Valuation analysis

Quick graphics

In conclusion, Ally Financial is a solid company. A track record of sales and EPS growth allows the company to pay growing dividends and buy more shares. The valuation is attractive as investors fear that higher rates will affect the company more significantly than other financial institutions. They think the risk is high. So the potential also seems high.

Opportunities

The company’s first growth opportunity is the growth of its Ally Bank business. The bank has total deposits of $146 billion, up $6.3 billion year-on-year, and it is managing to increase the number of its retail customers. This is an important long-term opportunity as these deposits will be used for future loans. Ally Financial now has access to cheap capital that will enable rapid growth in the future.

Ally Financial is completely digital, which has several advantages as we move forward. It appeals to the younger generation and can roll out new products faster. The use of data allows the bank to better customize offers for different customers, and it also allows the bank to save significant amounts of money on staff, rent, etc., and to be a very lean financial institution and efficient.

The company has proven that it can perform well even in times of uncertainty. This financial institution has been around for over 100 years, and as a result, it has faced significant challenges, including periods of high inflation and high unemployment. With the current safety margin due to the low valuation, there seems to be a medium-term opportunity for valuation expansion if the market becomes less worried.

Risks

Interest rates are rising and this poses a risk for Ally Financial. On the one hand, the company must offer higher rates to those who deposit their money in the bank. On the other hand, since the rates it charges on its loans are already higher than average, raising them further could reduce the number of future clients seeking a loan. Some potential customers may prefer to postpone their purchases.

Another risk is recession which may or may not occur due to higher rates. Although rates may make new loans less attractive, a recession will make it harder for Ally Financial to profit from its current portfolio. As unemployment rises during recessions, there is a growing risk of write-offs and the company will lose money on an increasing portion of its portfolio.

This risk is particularly relevant to Ally Financial as it targets difficult customers. The company targets customers with lower credit scores to charge higher interest rates. Therefore, these customers will be the first to suffer from a weakening economy, especially during a recession. Therefore, the customer profile is also a risk if the weak economy is here to stay.

conclusion

Ally Financial is a high risk, high reward game in the stock market. The company has strong fundamentals with growing sales and EPS. It has also been rewarding shareholders for several years. However, the business is in the risky business of high-interest loans, and it may become more difficult to grow during recessions. Therefore, investors should consider that ups and downs are important here.

Since there is such a large gap between positive and negative scenarios, this investment is not suitable for any dividend growth investor. Most dividend growth investors are looking for stability and a steady, growing stream of dividends. Ally Financial has a different risk profile. So there is more room for volatility. It should suit dividend growth oriented investors with a higher appetite for risk.

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Unimot SA (WSE:UNT) shares are doing well: is the market following the fundamentals? https://regiofora.com/unimot-sa-wseunt-shares-are-doing-well-is-the-market-following-the-fundamentals/ Thu, 17 Nov 2022 08:48:55 +0000 https://regiofora.com/unimot-sa-wseunt-shares-are-doing-well-is-the-market-following-the-fundamentals/ Unimot (WSE:UNT) has had a strong run in the equity market with a significant 32% rise in its stock over the past month. Since the market usually pays for a company’s long-term fundamentals, we decided to study the company’s key performance indicators to see if they could influence the market. In this article, we decided […]]]>

Unimot (WSE:UNT) has had a strong run in the equity market with a significant 32% rise in its stock over the past month. Since the market usually pays for a company’s long-term fundamentals, we decided to study the company’s key performance indicators to see if they could influence the market. In this article, we decided to focus on of the Unimot DEER.

Return on equity or ROE is an important factor for a shareholder to consider as it tells them how much of their capital is being reinvested. In short, ROE shows the profit that each dollar generates in relation to the investments of its shareholders.

Our analysis indicates that The UNT is potentially undervalued!

How do you calculate return on equity?

The return on equity formula is:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the formula above, the ROE for Unimot is:

39% = 189 million zł ÷ 486 million zł (based on the last twelve months until June 2022).

The “return” is the annual profit. This therefore means that for each investment of 1 PLN by its shareholder, the company generates a profit of 0.39 PLN.

What is the relationship between ROE and earnings growth?

We have already established that ROE serves as an effective profit-generating indicator for a company’s future earnings. Depending on how much of those earnings the company reinvests or “keeps”, and how efficiently it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and better earnings retention are generally the ones with a higher growth rate compared to companies that don’t. same characteristics.

A side-by-side comparison of Unimot’s earnings growth and 39% ROE

First, we recognize that Unimot has a significantly high ROE. Second, a comparison to the average industry-reported ROE of 23% also does not go unnoticed by us. As a result, Unimot’s exceptional net income growth of 48% over the past five years comes as no surprise.

Then, comparing with the industry net income growth, we found that Unimot’s growth is quite high compared to the average industry growth of 11% over the same period, which is great to see.

WSE:UNT Past Earnings Growth 17 November 2022

Earnings growth is an important factor in stock valuation. What investors then need to determine is whether the expected earnings growth, or lack thereof, is already priced into the stock price. By doing so, they will get an idea if the stock is headed for clear blue waters or if swampy waters are waiting. If you are wondering about the Unimot rating, check out this gauge of its price/earnings ratioin relation to its industry.

Does Unimot effectively reinvest its profits?

Unimot’s three-year median payout ratio to shareholders is 22%, which is quite low. This implies that the company retains 78% of its profits. So it looks like Unimot is massively reinvesting its profits to grow its business, which can be seen in the growth in its profits.

In addition, Unimot is determined to continue sharing its profits with shareholders, which we infer from its nine-year long history of paying dividends.

Conclusion

All in all, we are quite satisfied with the performance of Unimot. In particular, it is good to see that the company is investing heavily in its business and, along with a high rate of return, this has resulted in significant growth in its profits. If the company continues to increase earnings as it has, it could have a positive impact on its share price given how earnings per share influence prices over the long term. Not to mention that stock price results also depend on the potential risks that a company may face. It is therefore important for investors to be aware of the risks associated with the business. To find out about the 1st risk we have identified for Unimot visit our risk dashboard for free.

Valuation is complex, but we help make it simple.

Find out if Unimot is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Here’s why analysts are positive on Keystone Realtors’ Rs 635 crore IPO https://regiofora.com/heres-why-analysts-are-positive-on-keystone-realtors-rs-635-crore-ipo/ Mon, 14 Nov 2022 08:02:00 +0000 https://regiofora.com/heres-why-analysts-are-positive-on-keystone-realtors-rs-635-crore-ipo/ The Rs 635 crore Keystone Realtors (Keystone) initial public offering (IPO) opened for subscription on Monday and will close on Wednesday. The issue consists of a new issue of shares worth Rs 560 crore and an offer to sell worth Rs 75 crore remaining. The price range is set at Rs 514-541 per share. […]]]>

The Rs 635 crore Keystone Realtors (Keystone) initial public offering (IPO) opened for subscription on Monday and will close on Wednesday.

The issue consists of a new issue of shares worth Rs 560 crore and an offer to sell worth Rs 75 crore remaining. The price range is set at Rs 514-541 per share.

The company, a major property developer in the Mumbai Metropolitan Region (MMR), sells properties under the “Rustomjee” brand.

Analysts are positive on the company’s IPO given its asset-light model, strong brand, decent financials and attractive valuation.

The company mainly focuses on residential real estate projects in the affordable, medium and mass, ambitious, premium and super premium categories.

In FY20-22, its revenue and EBITDA grew at a CAGR of 2% and 15% respectively, while EBITDA margin grew from 11.2% in the fiscal year 20 to 14.1% in fiscal year 22.

It also recorded a CAGR of 208% in reported PAT at Rs 135 crore during FY22, driven by lower interest charges, as this declined from a high of Rs 230 crore during of FY21.


Main risks: Rise in interest rates, economic slowdown, risk of geographic concentration of activities, competition.


Here is what brokers recommend:


Reliance Securities | SUBSCRIBE

Although the company has been inconsistent with its results over the past few years, we believe the rising real estate sector and easing inflationary pressures bode well for Keystone. Given its leading position in the Mumbai real estate market, a strong pipeline of 35 million sq.ft. of salable area, a strong balance sheet and an attractive valuation, we recommend “SUBSCRIBE” to the broadcast.


KR Chowksey | SUBSCRIBE

The reputation and brand of the promoter are key factors contributing to the sale of projects in this micro-market. The company has aggressively reduced its debt and reduced its net debt to equity ratio from 7.7x in fiscal year 2020 to 1.1x as of June 30, 2022.

On the margin front, the company has ample potential for expansion as current margins include few one-time expenses. The real estate sector is expected to see a healthy increase in redevelopment projects and strong demand for residential projects, especially in metropolitan areas, which will be a huge opportunity for organized and branded players such as Rustomjee.

On the upper price range, the P/E ratio is 38.8x. Current value is attractive from a long-term perspective given the industry average P/E of 96.5x, according to the company.


Choice titles | SUBSCRIBE WITH CAUTION

In terms of absorption, it is one of the leading real estate developers in MMR’s micromarkets. Based on absorption levels between 2017 and 2021, it has a market share of 28% in Khar, 23% in Juhu, 11% in Bandra (East), 14% in Virar. In addition, the company’s customer base allows it to obtain a price premium of more than 50% in the markets of Juhu, Bandra (East) and Khar.

We estimate a 15.5% increase in pre-sale collections during fiscal years 22-24E. Revenue is expected to increase by 23.5% CAGR to Rs 1,936.5 cr in FY24E.

But given its 76.6% sequential drop in pre-sale activity (compared to an average 3% increase in peer activity), we suggest “Subscribe with caution.”


BP Shares | SUBSCRIBE

The company operates under an asset-light model by entering into joint development agreements, redevelopment agreements with landowners or developers, or corporations, and slum upgrading projects, which require lower initial capital investment to that of the direct acquisition of plots of land.

This approach ensures that its capital allocation is balanced and calibrated, allowing it to generate income with lower initial investments.

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COHEN LAWRENCE B’s Top 5 Buys https://regiofora.com/cohen-lawrence-bs-top-5-buys/ Thu, 10 Nov 2022 20:07:33 +0000 https://regiofora.com/cohen-lawrence-bs-top-5-buys/ COHEN LAWRENCE B recently filed its 13F report for the third quarter of 2022, which ended on 2022-09-30. The 13F report details the stocks that were in a guru’s stock portfolio at the end of the quarter, although investors should note that these filings are limited in scope, containing only an overview of long stock […]]]>

COHEN LAWRENCE B recently filed its 13F report for the third quarter of 2022, which ended on 2022-09-30.

The 13F report details the stocks that were in a guru’s stock portfolio at the end of the quarter, although investors should note that these filings are limited in scope, containing only an overview of long stock positions. listed in the United States and American certificates of deposit at the end of the quarter. They are not required to include international holdings, short positions or other types of investments. Yet even this limited repository can provide valuable information.

C/O NIXON PEABODY, 100 SUMMER ST. BOSTON, MA 02110

According to the latest 13F report, the guru’s stock portfolio contained 64 stocks valued at a total of $130.00 million. The main holdings were
AAPL(10.23%),
MSFT(6.58%) and
AMZN(4.13%).

According to data from GuruFocus, these were COHEN LAWRENCE B’s top five trades in the quarter.

Exxon Mobil Corp.

The guru established a new position worth 21,959 shares in NYSE:XOM, giving the stock a 1.48% weighting in the equity portfolio. The shares traded at an average price of $91.3 during the quarter.

On 11/10/2022, Exxon Mobil Corp traded at a price of $109.84 per share and a market capitalization of $451.69 billion. The stock has returned 74.98% over the past year.

GuruFocus gives the company a financial strength rating 8 out of 10 and one profitability rating out of 7 out of 10.

In terms of valuation, Exxon Mobil Corp has a price/earnings ratio of 8.95, a price/book ratio of 2.43, a price/earnings/growth (PEG) ratio of 44.75, an EV/Ebitda ratio of 4.86 and a price-to-sales ratio of 1.22.

The GF price/value ratio is 1.03, which earns the stock a GF Value Ranking of 3.

Chevron Corporation

The guru established a new position worth 12,347 shares in NYSE:CVX, giving the stock a 1.37% weighting in the equity portfolio. The shares traded at an average price of $152.51 during the quarter.

On 11/10/2022, Chevron Corp traded at a price of $180.12 per share and a market capitalization of $348.34 billion. The stock has returned 62.72% over the past year.

GuruFocus gives the company a financial strength rating 8 out of 10 and one profitability rating out of 6 out of 10.

In terms of valuation, Chevron Corp has a price/earnings ratio of 10.25, a price/book ratio of 2.20, a price/earnings/growth (PEG) ratio of 2.18, an EV/Ebitda ratio of 5.48 and a price-to-sales ratio of 1.55.

The GF price/value ratio is 0.93, which earns the stock a GF Value Ranking of 5.

Walmart Inc.

The guru established a new position worth 12,141 shares in NYSE:WMT, giving the stock a 1.21% weighting in the equity portfolio. The shares traded at an average price of $131.42 during the quarter.

On 11/10/2022, Walmart Inc traded at a price of $141.77 per share and a market capitalization of $384.78 billion. The stock has returned -2.99% over the past year.

GuruFocus gives the company a financial strength rating 7 out of 10 and one profitability rating out of 8 out of 10.

In terms of valuation, Walmart Inc has a price/earnings ratio of 28.30, a price/book ratio of 4.97, a price/earnings/growth (PEG) ratio of 7.08, an EV/EBITDA ratio of 14.04 and a price-to-sales ratio of 0.67.

The GF price/value ratio is 0.94, which earns the stock a GF Value Ranking of 6.

Materials Select an SPDR sector

The guru established a new position worth 22,913 shares in ARCA:XLB, giving the stock a 1.2% weighting in the equity portfolio. The shares traded at an average price of $74.83 during the quarter.

On 11/10/2022, Materials Select Sector SPDR traded at a price of $79.81 per share and a market capitalization of $5.72 billion. The stock has posted a return of -8.20% over the past year.

The data is insufficient to calculate the financial strength and profitability of the stock.

In terms of valuation, Materials Select Sector SPDR has a price-to-earnings ratio of 16.46 and a price-to-book ratio of 2.85.

Utilities Select Sector SPDR ETF

The guru established a new position worth 16,630 shares in ARCA:XLU, giving the stock a 0.84% ​​weighting in the equity portfolio. The shares traded at an average price of $72.86 during the quarter.

On 11/10/2022, the SPDR Utilities Select Sector ETF traded at a price of $68.19 per share and a market capitalization of $15.76 billion. The stock has returned 5.03% over the past year.

The data is insufficient to calculate the financial strength and profitability of the stock.

In terms of valuation, Utilities Select Sector SPDR ETF has a price-to-earnings ratio of 23.12 and a price-to-book ratio of 2.19.

Please note that figures and facts quoted are at the time of writing this article and may not reflect the latest business data or company announcements.

You want to give your opinion on this article ? Do you have questions or concerns? Contact us hereor email us at [email protected]!

This article is general in nature and does not represent the views of GuruFocus or any of its affiliates. This article is not intended to be financial advice, nor does it constitute investment advice or recommendation. It has been written without taking into account your personal situation or financial objectives. Our goal is to bring you data-driven fundamental analysis. The information on this site is in no way guaranteed to be complete, accurate or in any other way.

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Optimistic investors push Choice International Limited (NSE: CHOICEIN) up 28% but growth is lacking https://regiofora.com/optimistic-investors-push-choice-international-limited-nse-choicein-up-28-but-growth-is-lacking/ Thu, 03 Nov 2022 00:43:35 +0000 https://regiofora.com/optimistic-investors-push-choice-international-limited-nse-choicein-up-28-but-growth-is-lacking/ The Limited international choice (NSE: CHOICE IN) the stock price has done very well over the past month, posting an excellent gain of 28%. Longer-term shareholders would be grateful for a recovery in the share price as it is now virtually flat for the year after the recent rebound. After such a price hike, Choice […]]]>

The Limited international choice (NSE: CHOICE IN) the stock price has done very well over the past month, posting an excellent gain of 28%. Longer-term shareholders would be grateful for a recovery in the share price as it is now virtually flat for the year after the recent rebound.

After such a price hike, Choice International may be sending very bearish signals right now with a Price to Earnings (or “P/E”) ratio of 63.4x, as almost half of all companies in India have a P/ E ratios below 22x and even P/E below 11x are not unusual. Nevertheless, we would need to dig a little deeper to determine if there is a rational basis for the very high P/E.

Earnings growth seems to have deserted Choice International lately, which is nothing to brag about. One possibility is that the P/E is high because investors believe benign earnings growth will improve to outperform the market in the near future. If not, existing shareholders might be a bit worried about the viability of the stock price.

Our analysis indicates that CHOICEIN is potentially overvalued!

NSEI: CHOICEIN Price based on prior earnings as of November 3, 2022

We don’t have analyst forecasts, but you can see how recent trends are preparing the company for the future by checking out our free report on Choice International profit, turnover and cash flow.

What do the growth indicators tell us about the high P/E?

In order to justify its P/E ratio, Choice International would need to produce exceptional growth well above the market.

Looking back, last year delivered virtually the same number to the company’s bottom line as the year before. Although EPS was pleasantly up 75% overall from three years ago notwithstanding the last 12 months. Therefore, shareholders would likely have welcomed these medium-term earnings growth rates.

Interestingly, the rest of the market is also expected to grow by 21% over the next year, which is fairly even with the company’s recent mid-term annualized growth rates.

In light of this, it is curious that Choice International’s P/E sits above the majority of other companies. Apparently, many of the company’s investors are more optimistic than indicated lately and aren’t willing to drop their shares just yet. Nonetheless, they could brace themselves for future disappointments if the P/E falls to levels more in line with recent growth rates.

The Key Takeaway

The strong surge in share prices also pushed Choice International’s P/E to great heights. We would argue that the power of the P/E ratio is not primarily a valuation tool, but rather to gauge current investor sentiment and future expectations.

Our review of Choice International revealed that its three-year earnings trends do not have as much impact on its high P/E as we would have expected, given that they resemble current market expectations. When we see average earnings with market-like growth, we suspect the stock price may decline, driving down the high PER. If recent medium-term earnings trends continue, it will put shareholders’ investments at risk and potential investors at risk of paying an unnecessary premium.

You should take note of the risks, for example – Choice International has 2 warning signs (and 1 which is significant) that we think you should know about.

If you are uncertain about the soundness of Choice International’s businesswhy not explore our interactive list of stocks with strong trading fundamentals for some other businesses you may have missed.

Valuation is complex, but we help make it simple.

Find out if International choice is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Medical Properties Trust’s third quarter earnings tell a bullish story (NYSE:MPW) https://regiofora.com/medical-properties-trusts-third-quarter-earnings-tell-a-bullish-story-nysempw/ Fri, 28 Oct 2022 13:00:00 +0000 https://regiofora.com/medical-properties-trusts-third-quarter-earnings-tell-a-bullish-story-nysempw/ Ninoon Medical Properties Trust (New York stock market :MPW) has been a capital destroyer in 2022, falling more than -50% since the start of the year, while ETF Vanguard Real Estate (VNQ) fell -29.46%, and the SPDR S&P 500 Trust (TO SPY) has down -20.27%. Short-term interest in MPW topped 12%, while the decline in […]]]>

Ninoon

Medical Properties Trust (New York stock market :MPW) has been a capital destroyer in 2022, falling more than -50% since the start of the year, while ETF Vanguard Real Estate (VNQ) fell -29.46%, and the SPDR S&P 500 Trust (TO SPY) has down -20.27%. Short-term interest in MPW topped 12%, while the decline in the share price led to an inflated return above 10%. MPW has just released its third quarter results, and after reading the press release, I plan to average the dollar costs again. MPW is not a non-profit tech company or a meme stock, but stocks have been shrugged off as if there is something fundamentally wrong with the company. After the third quarter results, MPW looks much more like a broken stock than a broken company, and I believe these levels represent a long-term opportunity for capital appreciation and income generation.

Price

Looking for Alpha

MPW’s third-quarter earnings should have eased fears in the investing community as clarity around its operations was provided.

Prior to earnings, MPW had announced that it would sell 3 Connecticut hospitals to Prospect Medical Holdings and 11 of its facilities in Top notch healthcare. As part of the transaction with Prime Healthcare, MPW was repaid $30 million in funding. In early September, MPW sold 9 general acute care hospitals and 2 related medical office buildings to Prime for net proceeds of $360 million. On October 6, MPW announced that it would sell 3 Connecticut hospitals to Prospect Medical Holdings. The agreement establishes an aggregate sale price of $457 million. These sales were expected to reduce short-term debt in the third quarter and generated more than $1 billion in immediate cash.

In the new MPW press release Edward Aldaq, President and CEO of MPW, said performance at MPW’s facilities improved in the second and third quarters and is a testament to the resilience of well-funded hospitals. Since the start of the year, MPW has raised approximately $1.8 billion in cash from capital recycling transactions throughout its transaction, the partnership transaction with Macquaire Asset Management and proceeds from repayments of loans. The MPW is also expected to receive over $650 million in revenue in 2023 through other currently binding agreements.

Steward was a sore point when discussing MPW, and a thesis the Bears were unwilling to give up. During the third quarter, Steward completed its repayment of $450 million in Covid-related advances and collected $70 million from the Texas Medicaid program on overdue repayments. The bear thesis around Steward should fade as its positive revenue trends and annual cost structure savings from Steward should generate sustainable free cash flow (FCF) going forward. This should reduce the level of fear regarding Stewards Network hospitals and their ability to pay MPW in the future. As a previous pain point, a hurdle has been removed from the table and, in my view, the level of risk that some had speculated on has been mitigated with respect to MPW’s operating portfolio.

MPW figures do not reflect the possibility of a dividend cut as their operating funds have not decreased

Actual MPW Revenues were mixed, but more positive than negative. MPW generated $352.34 million in revenue in the third quarter, a shortfall of $36.68 million from the consensus estimate. Funds from operations (FFO), which are the main income investors investing in REITs, did not decline, coming in at $0.45 per share, in line with consensus estimates. MPW Q3 net income was $222 million or $0.37 per diluted share, representing a 27.59% year-over-year increase from $171 million or $0.29 per diluted share in Q3 2022. MPW provided guidance that should help the bullish thesis as MPW raised its earnings per share estimate in 2022 to $1.99-$2.01. MPW is also narrowing the spread on its NFFO forecast from $1.78-$1.82 to $1.80-$1.82, narrowing the range of its year-end results.

MPW pays a dividend of $1.16 per share, or $0.29 per quarter. In the last twelve months (TTM), MPW generated $0.43 in FFO in the fourth quarter of 2021, $0.47 in the first quarter of 2022, $0.46 in the second quarter of 2022 and $0.45 in the third quarter of 2022 , for a total of $1.81 in FFO per share. This represents $0.65 of FFO per share above its current annual dividend, creating an FFO payout ratio of 64.09%. The bearish sentiment around MPW’s dividend is unwarranted. I believe MPW’s dividend should be considered sustainable as MPW was able to generate more than enough FFO in a difficult year to meet its dividend obligations and retain a substantial amount of FFO after dividends were paid .

The other aspect that investors should pay attention to is MPW’s leverage. MPW reduced its total debt at the end of the third quarter to less than $10 billion. MPW has $1.3 billion allocated to its debt as part of its second and third quarter transactions, bringing its adjusted net debt to $8.17 billion after all proceeds are collected. This keeps MPW’s EBITDA to total debt ratio in line with its peers at 6.52x, and once adjustments are made to MPW’s net debt, this ratio falls below 6x.

MPW Q3 deposit

MPW

MPW’s valuation is still very cheap due to what I believe is unwarranted selling throughout 2022.

To provide an accurate view, I will compare MPW to the following healthcare REITs:

  • Healthpeak properties (PEAK)
  • Health Care Real Estate Trust (HOUR)
  • Physicians’ Real Estate Trust (DOC)
  • Domestic Health Investors (INSA)
  • Sabra Health Care (SBRA)
  • Omega Health Investors (IHO)

When I compare REITs, I look at the price of the FFO I’m paying and how a REIT is trading against its respective peers. MPW is still trading at a discounted valuation, as its price to FFO is 6.34x compared to its peer group average of 11.02x. Since there was no impact on MPW’s FFO, it appears undervalued relative to other healthcare REITs.

Price at FFO

Steven Fiorillo, In Search of Alpha

The MPW has a total debt of $9.48 billion, and I am using this figure because the adjustments have not gone into effect. MPW is limited and does not pose leverage liability like SBRA does. MPW’s EBITDA to total debt ratio of 6.52x is more than adequate when looking at its peers and once the adjustments take effect, it will fall below 6x.

EBITDA to debt

Steven Fiorillo, In Search of Alpha

Shares of MPW are trading at a level where its return has exceeded 10% and is the largest in its peer group. MPW also has the 2nd highest FFO coverage ratio at 156.90%, indicating that its dividend is safe and stronger than many of its peers. From a dividend perspective, MPW offers a high yield and a fully covered dividend, which should reassure investors that it is not a yield trap on the verge of a dividend cut.

Dividend

Steven Fiorillo, In Search of Alpha

Cover

Steven Fiorillo, In Search of Alpha

Conclusion

MPW’s third-quarter earnings provided further reassurance to news reports throughout the quarter. I believe Mr. Market is wrong and MPW is a broken stock, not a broken company. MPW has delivered its FFO and continues to repay its debt. The issues that Steward was facing appear to have been mitigated going forward with respect to MPW, as its operations will generate positive FCF. I believe MPW is trading at a steep discount to its peer group, and I plan to add more to my position to reduce my price per share and increase the amount of revenue generated from this position. I think we could see MPW shares climb above $15 through the end of 2022 and return to a more reasonable valuation in the first half of 2023.

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Will the weakness in shares of China Tobacco International (HK) Company Limited (HKG:6055) prove temporary given the strong fundamentals? https://regiofora.com/will-the-weakness-in-shares-of-china-tobacco-international-hk-company-limited-hkg6055-prove-temporary-given-the-strong-fundamentals/ Wed, 26 Oct 2022 01:03:26 +0000 https://regiofora.com/will-the-weakness-in-shares-of-china-tobacco-international-hk-company-limited-hkg6055-prove-temporary-given-the-strong-fundamentals/ It’s hard to get excited after watching the recent performance of China Tobacco International (HK) (HKG:6055), as its stock has fallen 34% in the past three months. However, a closer look at his healthy finances might make you think again. Since fundamentals generally determine long-term market outcomes, the company is worth looking into. In this […]]]>

It’s hard to get excited after watching the recent performance of China Tobacco International (HK) (HKG:6055), as its stock has fallen 34% in the past three months. However, a closer look at his healthy finances might make you think again. Since fundamentals generally determine long-term market outcomes, the company is worth looking into. In this article, we decided to focus on China Tobacco International (HK) DEER.

Return on equity or ROE is a key metric used to gauge how effectively a company’s management is using the company’s capital. In short, ROE shows the profit that each dollar generates in relation to the investments of its shareholders.

Our analysis indicates that 6055 is potentially overvalued!

How is ROE calculated?

The ROE formula is:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the above formula, the ROE for China Tobacco International (HK) is:

18% = HK$386 million ÷ HK$2.1 billion (based on trailing 12 months to June 2022).

The “return” is the annual profit. Another way to think about this is that for every HK$1 of equity, the company was able to make a profit of HK$0.18.

Why is ROE important for earnings growth?

We have already established that ROE serves as an effective profit-generating indicator for a company’s future earnings. Based on the share of its profits that the company chooses to reinvest or “keep”, we are then able to assess a company’s future ability to generate profits. Generally speaking, all things being equal, companies with high return on equity and earnings retention have a higher growth rate than companies that do not share these attributes.

Side-by-side comparison of China Tobacco International (HK) 18% earnings and ROE growth

At first glance, China Tobacco International (HK) seems to have a decent ROE. Compared to the industry average ROE of 5.2%, the company’s ROE looks quite remarkable. This certainly adds some context to China Tobacco International’s (HK) outstanding 23% net profit growth seen over the past five years. We believe that there could also be other aspects that positively influence the company’s earnings growth. For example, it is possible that the management of the company has made good strategic decisions or that the company has a low payout ratio.

We then compared the growth of China Tobacco International (HK) net income with the industry and we are pleased to see that the growth figure of the company is higher than that of the industry which recorded a growth rate 12% over the same period.

SEHK: 6055 Past Earnings Growth Oct 26, 2022

Earnings growth is an important factor in stock valuation. What investors then need to determine is whether the expected earnings growth, or lack thereof, is already priced into the stock price. This will help them determine if the future of the title looks bright or ominous. Is China Tobacco International (HK) correctly valued compared to other companies? These 3 recovery measures might help you decide.

Is China Tobacco International (HK) Reinvesting Profits Effectively?

China Tobacco International (HK) has a three-year median payout ratio of 26% (where it retains 74% of its revenue), which is neither too low nor too high. So it looks like China Tobacco International (HK) is effectively reinvesting to see impressive earnings growth (discussed above) and paying a well-covered dividend.

Additionally, China Tobacco International (HK) is determined to continue sharing its profits with shareholders, which we infer from its long three-year history of paying dividends.

Summary

Overall, we are quite satisfied with the performance of China Tobacco International (HK). In particular, it is good to see that the company is investing heavily in its business and, along with a high rate of return, this has resulted in significant growth in its profits. If the company continues to increase earnings as it has, it could have a positive impact on its share price given how earnings per share influence prices over the long term. Remember that the price of a stock also depends on the perceived risk. Therefore, investors should be aware of the risks involved before investing in a company. Our risk dashboard will have the 1 risk we have identified for China Tobacco International (HK).

Valuation is complex, but we help make it simple.

Find out if China Tobacco International (HK) is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Voltas share price: Voltas shares fall 1.19% as Sensex falls https://regiofora.com/voltas-share-price-voltas-shares-fall-1-19-as-sensex-falls/ Thu, 20 Oct 2022 08:20:00 +0000 https://regiofora.com/voltas-share-price-voltas-shares-fall-1-19-as-sensex-falls/ Shares of . traded down 1.19% to 864.55 rupees at 1:49 p.m. (IST) on Thursday, even as BSE benchmark Sensex fell 109.07 points to 58998.12. The stock stood at Rs 875.0 in the previous session. The stock quoted a 52-week high of Rs 1347.75 and a 52-week low of Rs 857.9, respectively. According to BSE […]]]>
Shares of . traded down 1.19% to 864.55 rupees at 1:49 p.m. (IST) on Thursday, even as BSE benchmark Sensex fell 109.07 points to 58998.12.

The stock stood at Rs 875.0 in the previous session. The stock quoted a 52-week high of Rs 1347.75 and a 52-week low of Rs 857.9, respectively. According to BSE data, the total trading volume on the counter till 13:49 (IST) stood at 10,967 shares with a turnover of Rs 0.95 crore.

At the current price, the company’s shares were trading at 58.27 times its 12-month earnings per share of 14.84 rupees per share and 7.49 times its price-to-book ratio, according to data from the BSE.

A higher P/E ratio shows that investors are willing to pay a higher price today due to growth expectations in the future.

The price-to-book ratio indicates the inherent value of a company and reflects the price investors are willing to pay even if the company does not grow. The stock’s beta, which measures its volatility relative to the broader market, was 1.17.

Shareholding details

The promoters held 30.3% of the company’s capital as of March 31, 2022, while the FIIs held 24.67% and the DIIs 17.27%.

Techniques

On the technical charts, the relative strength index (RSI) of the stock stands at 33.44. The RSI oscillates between zero and 100. Traditionally, it is considered an overbought condition when the RSI value is above 70 and an oversold condition when it is below 30. Chartists say that the RSI should not be considered in isolation, as it may not be enough to take a trade call, just as fundamental analysts cannot give a “buy” or “sell” recommendation using a single valuation ratio.

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Is Trinity Industries, Inc. (NYSE: TRN) potentially undervalued? https://regiofora.com/is-trinity-industries-inc-nyse-trn-potentially-undervalued/ Mon, 17 Oct 2022 12:00:15 +0000 https://regiofora.com/is-trinity-industries-inc-nyse-trn-potentially-undervalued/ While Trinity Industries, Inc. (NYSE:TRN) may not be the best-known stock right now, it has garnered a lot of attention due to a substantial price move on the NYSE over the past few months, hitting $28.10 at one point. , and falling as low as US$21.35. Certain movements in the stock price can give investors […]]]>

While Trinity Industries, Inc. (NYSE:TRN) may not be the best-known stock right now, it has garnered a lot of attention due to a substantial price move on the NYSE over the past few months, hitting $28.10 at one point. , and falling as low as US$21.35. Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to answer is does Trinity Industries’ current trading price of US$22.05 reflect the true value of the small cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Trinity Industries based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Trinity Industries

What is the opportunity in Trinity Industries?

According to my multiple price model, where I compare the company’s price-earnings ratio to the industry average, the stock currently looks expensive. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find Trinity Industries’ ratio of 32.06x to be higher than its average of 18.48x, suggesting the stock is trading at a higher price relative to the machinery industry. But is there another opportunity to buy cheap in the future? Since Trinity Industries’ stock price is quite volatile, this could mean that it may go down (or up even more) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

Can we expect growth from Trinity Industries?

NYSE: TRN Earnings and Revenue Growth October 17, 2022

Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profits expected to more than double over the next two years, the future looks bright for Trinity Industries. It seems that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.

What this means for you

Are you a shareholder? TRN’s bullish future growth appears to have been factored into the current share price, with the shares trading above industry price multiples. At this current price, shareholders may ask a different question: should I sell? If you think TRN should be trading below its current price, selling at a high price and buying it back when its price drops towards the industry PE ratio can be profitable. But before making this decision, see if its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on TRN for a while, now might not be the best time to get into the stock. The price has outpaced its industry peers, which means there are likely to be no more benefits from poor pricing. However, the optimistic outlook is encouraging for TRN, which means that it is worth digging into other factors in order to take advantage of the next price drop.

In light of this, if you want to do more analysis on the company, it is essential to be aware of the risks involved. Our analysis shows 3 warning signs for Trinity Industries (2 are potentially serious!) and we strongly recommend that you consult them before investing.

If you are no longer interested in Trinity Industries, you can use our free platform to view our list of over 50 other stocks with high growth potential.

Valuation is complex, but we help make it simple.

Find out if Trinity Industries is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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