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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: pcyhuang who wrote (24039)	6/4/2006 2:33:44 PM
From: bruwin	Respond to of 78731

AUO as a "Value play" ? Well, personally I'd be surprised. Latest Annual and Quarterly Turnover has fallen off, and this has also been reflected in a decline in Bottom Line profit. Operating Margin is down and TTM pre-tax Return on Capital is only 10%. According to the AUO link, we see a "5 Year expected PEG" of 1.21. Well, I believe it’s difficult enough trying to project 1 Year ahead in most factors related to stock markets, let alone 5 years ! In addition we see AUO’s Long Term Debt is currently 54% of Equity !! The fact that this is not adversely affecting AUO's Income Statement is a puzzle to me. Maybe others can explain why we don't see a greater "Interest Expense". IMHO, for this stock to be a current "Value play", all of the above factors should be reversed and the stock should be trading at a low P/E. If a company cannot, currently, show above average numbers in specific areas of its Financial Statements, as well as above average specific financial ratios, then what might, or MIGHT NOT, happen in the future is surely a matter of speculation, uncertainty and risk. The fact that its share price has been moving sideways since July 2004 should come as no surprise. I can't imagine it will be that much different in the future, unless AUO's fundamentals should warrant ongoing purchase of its stock by informed investors.