Category: Money Tips Date: 2006-09-11
Investors often surprised the market irrationality. Round of bull market, a number of research institutions favored by many blue-chip, for example: G China Merchants Bank, G ZTE does not outperform. The reason, research is still based on the valuation of the price-earnings ratio mechanical method, detached from the stock market's biggest attraction - growth.
ZTE to G as an example: why the performance decline, in fact, the background of the industry downturn Shiran. UT Starcom performance of the collapse of the previous year, followed by Huawei's overseas expansion when trouble Is G ZTE will be able to go unaffected? If investors last year's price-earnings ratio based upon the valuation, without regard to growth factors, investment would be prone to errors.
A similar case also electrical industry. In 2003 three of the companies before the electrical industry Dongfang Boiler, G East, mechanical and electrical performance of electrical and Shanghai are the low-profit or losses, but since 2003 the three companies became blue-chip blue-chip stocks. The most typical boiler, such as the East, 2003 years ago, and often a loss of performance, while last year's earnings per share has been more than 2 yuan. Performance of the electrical trade boom with the national large-scale hydropower projects are inseparable relationship between the Three Gorges project orders. If you press machine earnings valuation method, the performance loss of the year 2003, when the electrical trade stocks that lighten up, and the present-performing when the long-term investment. However, according to growth valuation method, by contrast, similar orders for the Three Gorges Project has a strong cyclical characteristics of the current blue-chip should be a good reason to be honored.
General valuation of growth factors to be considered much higher than price-earnings ratio valuation of complex and down are summarized in the following categories:
The first is a cyclical industry, typical cases such as: energy, non-ferrous metal plate and so on, their performance growth linked directly with the commodity price change.
The second is the majority shareholder-related stocks, that is the majority shareholder has a large number of quality assets, the recent good performance of the overall concept stock market, such as: G, on Hong Kong, G SAIC fall into this category; mentioned earlier, the electrical industry, the ultimate holding or national orders, but also can be assigned to this category; mentioned last week, Hualian Supermarket, the future changed its name to Xinhua after the media, shareholders, the strong background of course ought to this column.
Third, innovation and value stocks, mainly in technology stocks and consumer stocks, this year focused more on the small board.
