>>>Anyone remember how much more the currencies have fallen against the dollar
since the end of October?
Singpore $
10/11/97 1/4/98
Country
(1$/yen/etc.)=
US 1.5335 1.6950
Japan .01277 .01282
Korea .0016785 .001009
Malaysia .4963 .4270
Here is a chart showing currency differences between October and January. Unfortunately, without
knowing more about how they do their business, we can't really figure out what the impact
is on their profits.
For example, say they buy a dvd drive from a japanese company, who makes it in Korea, who
ships it to Malaysia for packaging by creaf in singapore. The contract for the components
could be specified in any currency, even US$. You could go crazy trying to figure this out.
Even if their were no loss due to devaluation of currencies between other Asian countries and
Singapore, you can bet that Asian buyers will postpone some large capital purchases, such as computers.
Even so, I've got to believe that most of this is reflected in the current price. A PE around 8,
and nobody's suggesting that they'll lose money. In comparison, Apple Computer's share price is
about the same and they're losing money. AOL is losing money, and is trading at a forward PE of
over 100, and the share price is 5x higher than creaf. And both are experiencing lower margins
than creaf. Granted they're in different industries, but I think it shows how undervalued this stock is long term. |
