Tiếng Việt
普通话
In an article recently published on Forbes Online, Peter Cohan recalls his visit to Singapore in January 2012 where he met with a hedge fund manager having invested in many Asian companies for years.
The hedge fund manager said that Indonesia used to be a great place to do business, but the best opportunity in the region in 2012 is to invest in Vietnam.
He studied the Vietnamese stock market and found 20 stocks with Price/Earnings (P/E) ratios of 2, cash flow growth of 14, and dividend yields of at least 12.
Cohan explained that a stock is cheap if its cash flow – the money left over after paying expenses – is growing faster than the P/E ratio.
A stock is a reasonable value if the ratio between a stock’s P/E and its earnings growth or Price/Earnings to Growth (PEG) is 1.0 or below. By that measure, stocks in Vietnam are very cheap at 0.14 – dividing the P/E of 2 by the cash flow growth of 14.
In addition, Vietnamese stocks offer a very high dividend yield.
Their 12 percent yield is extremely high – particularly compared to the sub-1 percent rates that we are used to earning on our bank accounts, Cohan noted.
According to Cohan, the downward trend in the Vietnamese stock market in 2011 offers the chance for private equity investors to buy stakes in some of the country’s biggest companies and the purchase is benefitting investors.
Cohan concluded that there are opportunities for businesses to invest in the banking, food and beverage industries in Vietnam, as its population increasingly moves from the lower to middle class income level and banks and food companies are willing to meet their demands.