More on stocks' performance year-to-date
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Source: Vietstock.vn, chart by Vietecon.com
Following on from my post from yesterday, I have a new set of charts to look at. I will try to go through them one by one and just point out the most interesting things.
Chart 1:
These are the big names (by market cap), and you can see how atrociously Vingroup has performed YTD. The bad news continued in 2Q, and it rebounded very little in July (all July data through the 23rd). The stock hasn’t been cheap for a while (it’s now about 40x P/E), which means it really needed very positive sentiment, which is hard to keep up. Real estate should probably keep chugging along, but they are also exposed to exports, retail, and manufacturing. All of which may be affected by COVID.
Vinamilk continues to be an interesting story. Such great returns. And a staple, so they should be able to skate through COVID. The only issue is that growth needs to come from exports, and returns are lower there and aren’t guaranteed.
The real estate names here (VHM and NVL) are doing alright. It will really depend on broad economic trends. High unemployment is not great.
Source: Investing.com, chart by Vietecon.com
Then there’s HPG. Wow! What a looker! It’s all from amazing results - steel sheet product sales are up 200% in the first half, exports up 100%. Steel pipes forecast to rise 10% for the year. I am surprised the stock isn’t up more!
Diving in a bit more, I am actually really surprised by how poorly HPG has performed over the past few years (see stock chart to the right). The stock has done well this year, but not that well (+20%) given the very strong results. It is still trading at under 9x forward P/E. Other steel companies are trading about a third higher (12x P/E) despite not as exciting results.
Source: Vietstock.vn, chart by Vietecon.com
And looking over the past few years, the stock has had a weird journey. It went way up (doubled, in fact) in late 2017/early 2018. But then it has just dropped, dropped, dropped like a Snoop Dogg beat. It is still well below where it was in late 2018.
But revenues and profits have risen fairly steadily over the past 10 years. And more recently, we have seen an enormous jump in revenues. Profits have not risen as quickly (margin deterioration), but it sure looks like the type of company you would want to invest in. Steady results, good margins, and a dominate market share (about a 1/3rd of the market, according to the company).
This is yet another company that seems to be relatively well-run but the stock performance is not all that exciting (depending, of course, on when you bought it). I will be watching this one.
Monday, the next batch of stocks.