27.5.14

How to buy thailand undervalued stocks


Unrest in Thailand

The political turmoil in Thailand shows no pause or any sort. In fact, this 12th military coup in the history of the country is making things worse for the country’s economy.

Thailand has been facing unrest for over the past six months and the Thai Baht has come down 2% compared to US dollar after the coup news.

Nevertheless, as investors dig through Thailand's history of coups, they will realise that the stock markets usually rebound sharply once things are stabilized.

Finding Undervalued Thai Stocks

So out of curiosity, I decided to run a stock filter based on the following:

  1. Exchange is SET [Stock exchange of Thailand]
  2. Return On Equity (FY) is >10 (%)
  3. Dividend Yield is 5 - 10 (%)
  4. P/E excluding extraordinary items (Q) is <10
Screenshot of Stocks which match the 4 filters

The rationale behind these screens? I want the stocks to be cheap and performing well in terms of ROE. One filter Warren Buffett tends to look for is "Has the company performed consistently well?" ROE is also referred to as "stockholder's return on investment." It reveals the rate at which shareholders are earning income on their shares.

Lastly, no one will know when the coup will end. Barring any unforeseen circumstances, I wish to look for a good dividend yield to help me tide over the uncertainty ahead. Of course, consistent dividend payouts and free cash flow will be important in judging if the yield can be sustained.


School of Thought

While it may not be comprehensive enough to capture other quality stocks as well, I believe a stock screening is definitely better than nothing. Moreover, there are still numerous stocks which we can zoom into their qualitative aspects.

In my next few posts, I will be touching on those Thailand stocks (if any) that possess one or more qualities such as great growth potential, high profit margins, margin of safety and more!

Like my post to receive more regular updates like this at www.facebook.com/kissinvesting. Thanks & HUAT AH!

5 comments:

  1. Hi there,

    This is very interesting as I am looking to invest in some undervalued Thai stocks. May I know what stock filter you used to bring up these results?

    Thanks!

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  3. A very informative post you have shared here. It can be of great use for the traders who want to buy Thailand stocks.

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