Monday, May 14, 2012

China-based companies at Bursa are dirt cheap?

KStar (5172) 24 sen; PE 2.27
Maxwell (5189) 41.5 sen; PE 2.38
MSports (5150) 38.5 sen; PE 2.47
Sozo (5187) 54 sen; PE 2.24
XDL (5156) 24.5 sen; PE 2.01
Xinquan (5155) 87.5 sen; PE 2.27

The above stocks are all China-based, and they are all being traded at PE of under three. The Chinese should find out why their stocks are being so lowly rated not only at Bursa but in Singapore and America as well. 

Investors do not like stocks that do not pay any dividend. They think that a stock that does not pay any dividend is not worthwhile to invest in. They are doubtful about their accounts and the integrity of the management. So, no matter how good a report is in the media, investors take no notice of it because their mentality is that China-based companies cannot be trusted.

A stock is traded at low PE for many reasons. Never invest in a stock just because its PE is low.