fishbone

ROE > 10 and PE < 10 are good companies

2013-04-18 01:13

fishbone

ROE is used more commonly in US. In Malaysia less emphasis is put for ROE than PER. In fact it is equally, if not more important than PER.

2013-04-18 01:23

fishbone

ROE reflects a company's profit more accurately as it takes into account the shareholder's equity.

2013-04-18 01:59

fishbone

Return on Equity = Net Income / Average Common Shareholder's Equity

The higher the ROE the better. Eg,if a company net income in 2012 is 1 million and equity is 10 million, the ROE is 10%. If the equity in 2013 increases by 50% but the net income only increases by 20 %, the ROE drops to 8%. In actual fact the company is considered less profitable.

If we apply EPS, the EPS has increased by 20%, which gives a false impression that the company has made "more" money.

Therefore ROE reflects a company's profit more accurately.

Econs or finance is not my specialty but I just conclude these understanding from my learning. please correct me if I'm wrong.

2013-04-18 21:49

jameslim88

I saw MSPORTS, xinquan, roe high, and Pe low, cash rish but no body want to buy? Yyyyyyyyyyyyyy, please advise?

2013-04-18 23:26

chieng8182

those are china-man companies? no confidence towards those guys.

2013-04-18 23:52

jameslim88

China man also business man, y no confident, then all people like to buy pn 4 company.

2013-04-19 00:01

max8

China based stock's Trustworthiness= Show us your Divident, show us your Consistent Result, show us your Growing Price. Then I would ride with the Dragon.

2013-04-19 06:38

fishbone

ROE and PE are not the only two indicators to look at. The China stocks have low dividend yield. Moreover look at the types of business they engage in: stationery, shoes.. What are the potentials for growth? Bottomline is: public confidence is lacking

2013-04-19 18:32