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At 6.00, United Malacca is a solid entry point with plenty of upside as the palm oil cycle starts to turn in our favour. Just hold steady and let the dividends compound while we wait for the share price to reflect its real value.
According to Professor Novy-Marx, the gross profitability (gross profit/total asset) is a return metric that has the same power as price to book value in prediction cross section returns of a stock.
When I compared Bursa Malaysia plantation company, United Malacca gross profitability with that of the sector median, you can see that it clearly underperformed. https://www.youtube.com/watch?v=9KhboTCMdEg
Moral of the story? Return is one key measure of profitability and I normally look at several return metrics – ROE, ROA, Gross Profitability, NOPAT/Capital to get a better picture.