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Valuation Over Price: Analysis Of DFM Listed Stocks

April 2016

By Fareem Chagla

April 18, 2016 | 12:30 | Dubai

With the onset of the quarterly earnings season, it is an ideal time to evaluate one’s Equity portfolio. Recent weeks have seen equity steal the show among asset classes, the Dubai Financial Market is a case in example, which has seen the benchmark DFM General Index return 12% for the year as on the 17th April. As highlighted in a recent post, a number of stocks have delivered stupendous returns with a major portion of the rally occurring in the recent past (Read: 10 Stocks On The DFM With Staggering Returns). While the earnings season would act as the ideal event equating sentiment with fundamentals, here is an analysis which would help you evaluate your stocks within the Dubai Financial Markets. We present the Price to Earnings ratio (Read more on P/E Ratio: WM in the Classroom: 5 Stock Market Terms You Must Know) for the listed stocks, based on available Trailing 12 months earnings data (Source: Bloomberg). While P/E may not be the most ideal ratio for some of the sectors listed, it does present a comparative picture aiding analysis. Also, at the same time, we would like to highlight that a high P/E may not necessarily signify an expensive stock – it may, as highlighted earlier, just need one to take a closer look at fundamentals, focusing on the upcoming results, to determine if the same is warranted.

Chart 1 - Source - DFM, Bloomberg, Wealth Monitor Intelligence

 

Chart 2 - Source - DFM, Bloomberg, Wealth Monitor Intelligence

* Stock prices as on 17th April

**EPS Source – Bloomberg, Trailing Twelve Month Earnings

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