In today’s briefing:
- Companies with High Stock Valuations and High Profitability Will Increasingly Attract Investment
Companies with High Stock Valuations and High Profitability Will Increasingly Attract Investment
- P/B’s slightly higher valuations in October 2023 while ROE, EPS, and BPS did not change much were due to external factors, not internal factors.
- Clearly, improvements in ROE and ROA are effective in improving stock valuations, but valuations have further increased for companies with higher valuations and profitability for the past year.
- Some of these companies have begun to use cash more effectively for investment and shareholder returns. The gap in market capitalization between these companies and the rest will increasingly widen.
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