Saturday, July 16, 2011
Posco (PKX) and Korean stocks
I've looked at this company (POSCO) long ago when Buffett took a stake in it. I want to get a sense for the P/E ratio of the stock right now. 77 million shares at the end of 2010.
Revenues: (in trillions of Won)
2010: 61 (wow!) This is US$53 billion
Earnings have followed along with revenues almost. 2006 had 13% net margin. 2010 had 7.2%.
Debt to equity ratio has been rising over the years.
In 2010, they earned US$49.47 per share. The stock is selling for $109. So the P/E is roughly around 2. This is probably misleading because the steel industry is very volatile. But still, it's priced for a major drop in the steel industry. Everyone knows China has been overbuilding. Are they still overbuilding?
Korea Electric Power Corporation
20-F for 2010
Oops, they've been losing money for 3 years. Just looking at the revenues and income going back to 2006, I'd guess a reasonable stock price would be ten dollars. It's selling for $12.91. I didn't cheat, really!
So that stock isn't selling cheap.
The Korea fund claims the forward (ok, if you have a time machine, why don't you just tell us the future stock prices... actually just tell me) P/E ratio for the fund is 10.43 as of June 30 (it closed at $49.27 and the current price is $50). That's twice the price that Yahoo is showing.
It's not a bad investment at this price, but I'd rather find something cheaper if possible.