Stock prices of Cathay Pacific Gold and Fubon Gold have been falling, which should you choose for financial stocks? 20 years of Taiwan stockholders: One reason, I choose Fubon Gold- Today Weekly

At the beginning of the month, I published an article about Cathay Pacific Gold (2882) and Fubon Gold (2881) The conclusion is that from the point of view of the yield rate, if the stock price falls further, the potential yield rate of dividend distribution will be the year next in There are more than 4%, friends who want to invest in the long term, may wish to pay attention.

This week, a classmate in my tutor class asked me:“If you have limited money, which one should you choose first?”Before I could answer, many students rushed to answer: “Of course, this is Cathay Pacific Gold, because its stock price has returned to the 4th prefix.” Gold has long-term investment value, but this time I discovered a strange phenomenon: why Fubon Gold did not follow Cathay Gold to see the prefix 4?

Changes in the stock price comparison of Cathay Gold and Fubon Gold

It is not without reason that I think this way, becauseIn the past, it could be said that the stock prices of Fubon Gold and Cathay Pacific Gold have followed the same, because they both belong to insurance stocks. If there is systematic risk, both must fall together. In the past , the status of the two in domestic financial stocks is different. There are advantages. If you look at the overall profit of the company, Cathay Pacific is slightly better, but if it is compared to earnings per share (EPS), it is Fubon Gold.

Because of this the competition between Fubon Gold and Cathay Gold in the financial stocks in the past was always in the middle, and it was not possible to distinguish between them. However, this situation may change this year.

Stock price trend of Cathay Pacific Gold and Fubon Gold (2010-111 September 17)

Source: Tai Fu Information

The picture above is a comparison chart of the stock price trends of Cathay Pacific Gold and Fubon Gold. We can find that the stock prices of the two gold holdings really follow each other. Not only is the time of the high point near, but there is no almost no difference in the place where the low point stock price By the end of 2010, the annual average price of the two was 42.82 yuan for Fubon Gold and 39.74 yuan for Cathay Gold. The difference was only 3 yuan, and the difference price less than 10%.

But by the end of 2011, the annual average price of Fubon Gold reached 68.52 yuan, and the annual average price of Cathay Gold reached 53.69 yuan, and the price difference between the two reached 27%. In addition, this year’s stock price has fallen 36.4% until last week, and Cathay Pacific fell 37.8%.

Some investment friends will probably say that the IFRS Bulletin No. 9 evaluation of financial assets has led to a loss of net worth, and some people will also say that the loss of the epidemic prevention policy has led to the decline of stock prices. of both companies These answers are all correct, but my question Yes, why until last week, Fubon Gold has not broken the bottom yet, but Cathay Pacific Gold is still breaking the bottom, so that the closing price difference between the last two weeks widened further to 13.7 yuan, a range of 32%.

Some people will probably say: “Because foreign investors sell less Super Fubon Gold and more Super Cathay Gold”, yes, but why are foreign investors so biased?

The key lies in EPS

My opinion is: because of EPS. Fubon Gold’s accumulated earnings per share (EPS) for the first eight months was 7.29 yuan, while Cathay Pacific’s accumulated earnings per share (EPS) for the first eight months was only 3.72 yuan, a gap that almost doubled. Although Fubon Gold is still the EPS profit king, followed by Cathay Pacific Gold, the gap has widened significantly compared to the previous five years.

EPS comparison between Cathay Pacific Gold and Fubon Gold in the last 5 years

years

Cathay Gold

Gold Fubon

edge

August 111 years ago 3.72 7.29 95.9%
110 years 10.34 12.49 20.7%
109 5.41 8.54 57.8%
108 4.76 5.46 14.7%
107 3.95 4.52 14.4%
106 years 4.47 5.19 16.1%
Data curation: Chen Weitai

Attached to table 1 is the EPS comparison between Cathay Pacific Gold and Fubon Gold in the last five years.After 109 years, Fubon Gold’s EPS began to widen the gap with Cathay Pacific Gold. I believe this is also the reason why Fubon Gold’s highest price can reach 85.7 yuan in the next 110 years, but Cathay Pacific Gold’s highest price is only 68.4 yuan Bar.

Shareholders should pay more attention to EPS

Going back to the students’ choice of Fubon Gold and Cathay Gold at the beginning, the students intuitively chose Cathay Gold because its share price was relatively low. However, for stockholders, EPS should be more important. The reason is that if the company has EPS, it will pay dividends. Some companies have high net worth, but the assets in their hands will not become EPS ( this is true with many asset stocks) The land and the factory buildings have been losing money year after year, and the minority shareholders cannot receive dividends every year. This is not the result we want.

In the investment value theory of investment guru Peter Forest, it is mentioned that the investment value of a company is not only limited to the assets of the company, but also has a more important condition, which is the profitability of the company. If there is no way to generate cash flow with idle assets, then the company has no investment value. This point resonates with the stock god Buffett.

therefore,If money is limited, even though the share price of Cathay Gold is lower, I will still choose Fubon Gold, because this year’s EPS should be more than Cathay Pacific Gold’s, and the dividends it deserves will be more than Cathay Pacific Gold’s.the above opinion is for your reference, and I wish a smooth investment to all investment friends.

About the Author_Chen Weitai

Involved in the financial and securities industry for more than 17 years, a qualified securities analyst, currently the chief investment officer of Zhongying Wealth, CMoney Quanyao Financial Consultant, Financial Editor, and lecturer of the Securities Foundation and Zhongzheng Community University, Today Weekly, Yahoo Wealth Management Column, Fortune Net Business Week special writer.

The investment mindset focuses first on the long-short cycle of the general economy, and combines fundamental stock selection with technical operations; it is believed that “choosing the opportunity to enter the market” is the profit method of investment in the stock market. Currently, there are 2 books: “Trust me, you can’t make enough money”, “Taiwan stock shareholders calendar”.

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※ The information provided by this website and the author is for reference only, and investors should bear their own investment risks and investment results.

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