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What Genting Singapore PLC Could Look Like To Value Investors

Value investors tend to search for investing opportunities amongst companies that have fallen hard in price.

One blue chip stock that has seen its share price suffer over the past two years is the casino and resort operator Genting Singapore PLC (SGX: G13) – its share price has fallen by 35%.

But, value investors also look beyond a company’s stock price movement. They look at the business fundamentals too.

There are many things about a company that value investors tend to focus on and it’s also true that different investors have their own set of preferred metrics. But in here, let’s look at three aspects of Genting Singapore’s fundamentals that value investors may be interested in: Its price-to-book (PB) ratio, price-to-free cash flow (PFCF) ratio, and growth-trends in the business.

The PB ratio

At Genting Singapore’s current share price of S$0.74, it has an adjusted book value per share of S$0.59 (adjusted for the presence of perpetual securities on Genting Singapore’s balance sheet). This gives the company a PB ratio of 1.26.

genting-singapores-adjusted-pb-ratio-since-28-september-2011
Source: S&P Global Market Intelligence

As you can observe from the chart above, this is a PB ratio that is near a five-year low for Genting Singapore.

The PFCF ratio

Genting Singapore’s PFCF ratio has a similar dynamic to its PB ratio – it’s near a five-year low, as the following chart shows.

genting-singapores-pfcf-ratio-since-28-september-2011
Source: S&P Global Market Intelligence

At Genting Singapore’s current share price, it is trading at 8.1 times its trailing free cash flow.

Growth trends in the business

The company has actually seen some of its important business numbers decline steadily over the past few years.

genting-revenue-and-ebitda
Source: Genting Singapore 2015 annual report

From 2011 to 2015, Genting Singapore has seen both its revenue and EBITDA (earnings before interest, taxes, depreciation, and amortisation) fall.

A Foolish conclusion

Putting it all together, Genting Singapore is a company with PB and PFCF ratios that are near five-year lows. That’s something value investors could like to see. But then, the company’s falling revenues and EBITDA could also be important sources of worries for value investors.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.