The Edge Singapore has picked out several public-listed companies featured on Temasek’s website and Bloomberg and scored them based purely on quantitative metrics. The scoring table comprises 20 companies, nearly half of which are domestically listed.
The scoring table considers six aspects of each company.
- The first is historical performance, which looks at the company’s financials over the past 10 years, where discounts are given for poor performance and inconsistency.
- The second is profitability, which examines profitability ratios such as return on equity, return on assets and margins.
- The third aspect is yields and valuation, which compares the company’s fundamental yields against the risk-free rate, along with its relative valuation to peers.
- The fourth aspect is financial safety, which examines the company’s balance sheet, including liquidity and solvency ratios, the quality of its shareholder equity and any external credit ratings on the company.
- The fifth is sentiment, which looks at analyst ratings and forward price ratios.
- Lastly, the price-to-value aspect compares the price growth to the weighted value growth over multiple periods. This weighted value includes revenue, net income and cash flows in ascending order.
The scoring table considers six aspects of each company.
- The first is historical performance, which looks at the company’s financials over the past 10 years, where discounts are given for poor performance and inconsistency.
- The second is profitability, which examines profitability ratios such as return on equity, return on assets and margins.
- The third aspect is yields and valuation, which compares the company’s fundamental yields against the risk-free rate, along with its relative valuation to peers.
- The fourth aspect is financial safety, which examines the company’s balance sheet, including liquidity and solvency ratios, the quality of its shareholder equity and any external credit ratings on the company.
- The fifth is sentiment, which looks at analyst ratings and forward price ratios.
- Lastly, the price-to-value aspect compares the price growth to the weighted value growth over multiple periods. This weighted value includes revenue, net income and cash flows in ascending order.
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Half the companies on the list appear to be fairly valued, with the rest mostly undervalued. Table 1 shows Temasek’s stake in these featured companies, while Table 2 shows their scores. The two most undervalued companies are Borsa Italiana-listed Moncler SpA, which manufactures apparel products, and Hong Kong-listed Alibaba Group, a global giant in the internet and online sales services space. Readers and investors who wish to invest in companies in which Temasek has invested could further examine the high-scoring companies through qualitative analysis.
Disclaimer: This article is for information purposes only and does not constitute a recommendation, solicitation or expression of views to influence readers to buy or sell stocks, including those mentioned herein. This article does not take into account the investor’s financial situation, investment objectives, investment horizon, risk profile, risk tolerance and preferences. Any personal investments should be done at the investor’s own discretion and or after consulting licensed investment professionals at their own risk.
