Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Contribute
Submit Post

Latest topics

» Poultry Sector
by bhanu Today at 5:57 pm

» EAST WEST PROPERTIES PLC (EAST.N0000)
by Chanaka303 Today at 5:06 pm

» TOKYO CEMENT COMPANY (LANKA) PLC (TKYO.X0000)
by Cliff777 Today at 3:33 pm

» ACCESS ENGINEERING PLC (AEL.N0000)
by Eng Krishantha Today at 3:16 pm

» BAIRAHA FARMS PLC (BFL.N0000)
by Ekanayake90 Today at 3:14 pm

» ගොන් බූරු සජී පුතානෝ......................
by Teller Today at 2:48 pm

» Plantation Sector
by Miss-Sangeetha Today at 1:46 pm

» TEEJAY LANKA PLC (TJL.N0000)
by npgslnawa Today at 12:58 pm

» ASPI should come down by 368 points
by Avon Today at 11:35 am

» MTD WALKERS PLC (KAPI.N0000)
by Teller Today at 11:08 am

» ආයෝජනයට හොඳම රට බවට ශ්‍රී ලංකාව පත්කිරීම තම අභිප්‍රාය බව ජනපති පවසයි
by Teller Today at 10:55 am

» DOCK DEAL AT 65 TOMORROW, DOCK MAY BE VERY HOT..
by roshan1039 Today at 10:24 am

» COLO and DOCK Moving to 100
by npgslnawa Today at 12:37 am

» ණය අයකර ගැනීම වසර තුනකට අත්හිටුවන්න
by npgslnawa Today at 12:25 am

» Sri Lanka to enter into MoU with India to upgrade Jaffna International Airport
by KavinduTM Yesterday at 11:26 pm

» B P P L HOLDINGS PLC (BPPL.N0000)
by KavinduTM Yesterday at 9:15 pm

» BIMPUTH FINANCE PLC (BLI.N0000)
by Teller Yesterday at 8:20 pm

» OVERSEAS REALTY (CEYLON) PLC (OSEA.N000)
by KavinduTM Yesterday at 2:07 pm

» Sri Lankan scientists claim possible preventive novel coronavirus treatment
by KavinduTM Yesterday at 1:59 pm

» Sri Lanka airport’s US$500mn expansion deal won by Japan’s Taisei
by KavinduTM Yesterday at 1:34 pm

» Policy Rates on hold on the road to recovery
by Quibit Yesterday at 12:48 pm

» STRATEGY REPORT 2020
by Quibit Yesterday at 12:43 pm

» Flawed rationale behind EPF re-entering the stock market
by ThilinaM Yesterday at 12:28 pm

POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC

Advertise

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Earnings Per Share Vs Net Asset Per Share

Earnings Per Share Vs Net Asset Per Share

Go down  Message [Page 1 of 1]

1Earnings Per Share Vs Net Asset Per Share Empty Earnings Per Share Vs Net Asset Per Share on Wed May 14, 2014 3:10 pm

ADP

ADP
Manager - Equity Analytics
Manager - Equity Analytics
If there are two stocks A and B in the same sector and company A has a EPS of 30 and a Net Asset  Per Share of 175 trade price is 190, and Company B has a EPS of 20 and a Net Asset Per Share of 480 and trades at 240.

Which company would you buy and why?

2Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Wed May 14, 2014 3:41 pm

Lalindra

Lalindra
Manager - Equity Analytics
Manager - Equity Analytics
Hypothetically I would go for share B because the PBV is more attractive than share A and any gain from the current trading price to NAVPS is a profit. That's on short term.
However on a long term, since both companies are in the same sector I would check the quarterly results of both companies at least 4 quarters back and give more vantage to PER before deciding.

3Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Wed May 14, 2014 6:55 pm

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I prefer with company A which depicts low PE ratio though NAV is lower than current trading price. It is true that company B's trading price is well below its net assets value that many argue it is undervalued. Considering the nature of business & on going situation may change the choice.

4Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Wed May 14, 2014 9:59 pm

kalanaym

kalanaym
Senior Equity Analytic
Senior Equity Analytic
If there is no any additional information available, since both shares are good, I would buy them allocating funds 50, 50 to both shares.

5Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 7:15 am

Sstar

Sstar
Vice President - Equity Analytics
Vice President - Equity Analytics
I will go for the higher EPS company. Higher NAV company may have non performing assets whereas higher EPS company may be utilizing the assets better than the higher NAV Company. After all Market vise, stocks are trading around 1.5 BV and 10X PER? Accordingly, Rs 1/= of NAV will have only Rs 1.50 effect on share price whereas Rs 1/= increase in Earning will have Rs 10/= impact on the share price.

As a shareholder, we are more interested in earnings, dividends and capital appreciation. Higher NAV company should give higher return if assets are better utilized. In your case higher NAV company seems to be inefficient organization. Revaluation of assets and resultant reevaluation reserves cannot be distributed whereas as profits can be distribued giving better capital appreciation to shareholders.

You may have to look at other qualitative assessment factors about the company before making the final decision. (Eg Management, goodwill etc). This way we could determine whether the high NAV company has the potential to utilize its assets better and make more ROA. If so taking a bet on high NAV company may not be a bad idea cause it has better future opportunities.

6Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 9:05 am

stevenapple


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Sstar wrote:I will go for the higher EPS company. Higher NAV company may have non performing assets whereas higher EPS company may be utilizing the assets better than the higher NAV Company. After all Market vise, stocks are trading around 1.5 BV and 10X PER? Accordingly, Rs 1/= of NAV will have only Rs 1.50 effect on share price whereas Rs 1/= increase in Earning will have Rs 10/= impact on the share price.

As a shareholder, we are more interested in earnings, dividends and capital appreciation. Higher NAV company should give higher return if assets are better utilized. In your case higher NAV company seems to be inefficient organization. Revaluation of assets and resultant reevaluation reserves cannot be distributed whereas as profits can be distribued giving better capital appreciation to shareholders.

You may have to look at other qualitative assessment factors about the company before making the final decision. (Eg Management, goodwill etc). This way we could determine whether the high NAV company has the potential to utilize its assets better and make more ROA. If so taking a bet on high NAV company may not be a bad idea cause it has better future opportunities.

Good one Sstar.True there are some other factors to factor in. Such as possible management change would propell the gowth of B company exponentially. Possiible divestment of non performing asset will improve its ratios.

7Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 12:23 pm

ADP

ADP
Manager - Equity Analytics
Manager - Equity Analytics
Thank you all for your thoughts.

What I think is NAV should be given more consideration if sale of a stake  of the company or liquidation comes into play.

But EPS or PER is more relevant when it comes into pricing the stock. However the actual dividend payout generally is not be equal to EPS. So shouldn't the actual dividend payout of the company be given consideration.

8Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 1:12 pm

Lalindra

Lalindra
Manager - Equity Analytics
Manager - Equity Analytics
Agreed ADP in case of higher EPS the dividend payout could be higher. Also a share with higher NAVPS could be a company with enhanced reserves which could declare a bonus issue. It works both ways. Essentially ROE and ROA if available should be other important criteria which should be considered when taking investment decisions.

9Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 1:41 pm

D.G.Dayaratne


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
NAV mainly based on assets valuation

Accountants can manipulate NAV as in case of SIRA

10Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 1:50 pm

Lalindra

Lalindra
Manager - Equity Analytics
Manager - Equity Analytics
@D.G.Dayaratne wrote:NAV mainly based on assets valuation

Accountants can manipulate NAV as in case of SIRA

That's why Return on Net Assets becomes an essential criteria.

11Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Thu May 15, 2014 9:16 pm

ADP

ADP
Manager - Equity Analytics
Manager - Equity Analytics
Is there a source where I can get the following information on any company on CSE for the last five years? ( know CSE has individual qurter results but that's a lot of work to collect all the data.)

EPS
NAPS
PER
Public float (%)
Annual Dividend payout
Issued number of shares
Revenue

I don't know why there isn't some place where this information is available. If there isn't such a place maybe we should start one.

12Earnings Per Share Vs Net Asset Per Share Empty Re: Earnings Per Share Vs Net Asset Per Share on Fri May 16, 2014 11:26 am

bandulawee


Manager - Equity Analytics
Manager - Equity Analytics
The best place I can suggest is cse.lk. If you subscribe you can get latest company information for all listed companies and you may be able to compute all ratios and updated on a worksheet

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum