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Thai Beverage Public Company Limited Is Down More Than 35% In The Last 12 Months: Is It Cheap Now?

Thai Beverage Public Company Limited (SGX: Y92) is a company operating in four different segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages. Year-to-date, Thai Beverage’s stock price is down more than 35% to S$0.59 (as of the time of writing). This raises a question: Is Thai Beverage cheap now? The question is important because if the firm’s shares are cheap, it might be a good opportunity for investors to buy its shares.

Unfortunately, there is no easy answer. However, we can still get some insight by comparing Thai Beverage’s current valuations with the market’s valuation. The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.

I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).

Thai Beverage currently has a PB ratio of 4.0, which is higher than the SPDR STI ETF’s PB ratio of 1.1. Similarly, its PE ratio is higher than that of the SPDR STI ETF’s (26.8 vs 11.2). Also, the firm’s dividend yield of 2.0% is lower than the market’s yield of 3.6%. The lower a stock’s yield is, the higher is its valuation.

In sum, we can argue that Thai Beverage is priced at a premium to the market average due to its high PB ratio, high PE ratio and low dividend yield.

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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.