Leading real estate investment opportunities now?
The A-share market has recently entered a period of sharp shocks, and the valuation of some sectors has fallen all the way. As of the latest, the three sectors of banking, architectural decoration and real estate have fallen below net assets. Among them, the price to book ratio of the banking sector is 0.62 times, the penultimate, and the price to book ratio of the architectural decoration and real estate sectors is less than 0.9 times. It is worth noting that the valuation of some leading stocks in the construction and real estate sector has also frequently hit record lows. Among them, the cash on the account of leading companies such as CSCEC and Poly Real estate has exceeded their total market value.
On the whole, as of July 28, the cash on the accounts of as many as 66 stocks exceeded their total market value, mostly concentrated in the real estate construction sector. Some people believe that cash exceeding the total market value is a sign of undervaluation of the company. Is that really the case?
Cash on account of 66 shares exceeds the total market value
Data treasure statistics show that the above 66 stocks are mainly concentrated in the real estate sector, with a total of 31 stocks on the list. Followed by the non bank financial industry, with 16 stocks. There are 11 stocks in the architectural decoration sector. In addition, home appliances, transportation, mining and other sectors have more than 2 shares.
From the perspective of cash to market value ratio, the highest is CCCC real estate, nearly five times. The monetary capital of the stock is 19.3 billion yuan, and the latest total market value is more than 3.9 billion yuan. In addition, the monetary capital of 12 stocks such as Blu ray development, HUAFA and Jianfa is more than twice the total market value.
Theoretically, when a company’s cash exceeds the total market value, investors can buy all the stocks in the secondary market, and then deal with all the assets to arbitrage. In other words, cash exceeding the total market value is a manifestation of undervaluation, which is similar to the price to book ratio.
However, it should be noted that in reality, the above operation is almost impossible. Because we want to buy all the stocks of relevant individual stocks in the secondary market, the share price is bound to rise sharply, thus raising the total market value. At the same time, it is also necessary to comprehensively consider the asset liability ratio and price to book ratio of individual stocks. For example, while some companies hold hundreds of billions of cash, they also have hundreds of billions of liabilities.
To sum up, exceeding the total market value of cash does not mean that it is extremely undervalued, which should be considered comprehensively in many aspects. For example, the profitability of some companies is worrying, which may lead to rapid consumption of cash flow. For example, some real estate companies may cause the above situation once the house is not sold well and the cash flow does not keep up. At the same time, as a large capital consumer, real estate companies have been severely suppressed by policies in recent years, and it is difficult to improve their valuation.
The organization said that the investment time of excellent companies has come
However, from the perspective of the net price earnings ratio of each stock market in the list, the undervaluation is visible. Data show that 46 stocks in the list fell below net assets, and the net rate of 10 stock markets such as Cinda real estate, Rongsheng development and Blu ray development was less than 0.5 times; The earnings ratio of Blu ray development, Zhongnan Construction, Rongsheng development and other stock markets is less than 3 times; The dividend yield of individual stocks such as Zhongnan Construction, Jinke and Jizhong energy all exceeded 5%.
Overall, 25 stocks in the list have a dividend yield of more than 3% and a P / E ratio of less than 10 times. Among them, the dividend yield of Zhongnan Construction is 12.22% and the P / E ratio is 2.44 times, and the dividend yield of Jinke shares is 10.51% and the P / E ratio is 3.22 times.