Low-Fliers Are Enjoying Elevated Market Status

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Low-Fliers Are Enjoying Elevated Market Status

Shares with low price-earnings ratios are rallying. Price-earnings ratio, often called PER, refers to the ratio of a certain stock's price on the market to its earnings per share. The lower the ratio, the lower the stock is valued, compared with the firm's earnings performance.

Daewoo Motor Sales Co. is the star among shares with low PERs. Shares in the automobile sales unit of Daewoo Motor Co. were up 125.7 percent to 3,950 won ($3.05) on Friday from 1,750 won on April 10. The benchmark Korea Composite Stock Price Index gained 27 percent during the same period.

Analysts said that growing expectation about a possible takeover of the bankrupt carmaker by General Motors Corp. helped the stock. Still, Daewoo Motor Sales' share price was low, compared with its earnings performance, they added. The firm's shares on April 10 fell short of its earnings per share, which stood at 1,973 won on that day.

Dongbu Fire & Marine Co. was up 125.2 percent from April 10 to Friday, followed by Dongsu Industrial Co. (90.0 percent), Daelim Industrial Co. (74.3 percent) and Hyundai Mobis (71.8 percent).

The rally in low-PER stocks was across all sectors and themes because of a fundamentals-based investment pattern among investors, analysts said.



by Lee Hee-sung

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