Posted by fishbone > 2013-04-18 01:13 | Report Abuse

ROE > 10 and PE < 10 are good companies

Posted by fishbone > 2013-04-18 01:23 | Report Abuse

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.

Posted by fishbone > 2013-04-18 01:59 | Report Abuse

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

Posted by fishbone > 2013-04-18 21:49 | Report Abuse

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.

Posted by jameslim88 > 2013-04-18 23:26 | Report Abuse

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

Posted by chieng8182 > 2013-04-18 23:52 | Report Abuse

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

Posted by jameslim88 > 2013-04-19 00:01 | Report Abuse

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

Posted by max8 > 2013-04-19 06:38 | Report Abuse

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.

Posted by fishbone > 2013-04-19 18:32 | Report Abuse

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