Declining Stock and Solid Fundamentals: Is The Market Wrong About Delfi Limited (SGX:P34)?

editorial-team@simplywallst.com (Simply Wall St)

Fri, May 16, 2025, 12:47 AM 3 min read

It is hard to get excited aft looking astatine Delfi's (SGX:P34) caller performance, erstwhile its banal has declined 4.7% implicit the past 3 months. However, banal prices are usually driven by a company’s fiscal show implicit the agelong term, which successful this lawsuit looks rather promising. Particularly, we volition beryllium paying attraction to Delfi's ROE today.

Return connected Equity oregon ROE is simply a trial of however efficaciously a institution is increasing its worth and managing investors’ money. Put different way, it reveals the company's occurrence astatine turning shareholder investments into profits.

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Return connected equity tin beryllium calculated by utilizing the formula:

Return connected Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based connected the supra formula, the ROE for Delfi is:

13% = US$34m ÷ US$265m (Based connected the trailing 12 months to December 2024).

The 'return' is the yearly profit. So, this means that for each SGD1 of its shareholder's investments, the institution generates a nett of SGD0.13.

View our latest investigation for Delfi

So far, we've learned that ROE is simply a measurement of a company's profitability. Based connected however overmuch of its profits the institution chooses to reinvest oregon "retain", we are past capable to measure a company's aboriginal quality to make profits. Assuming each other is equal, companies that person some a higher instrumentality connected equity and higher nett retention are usually the ones that person a higher maturation complaint erstwhile compared to companies that don't person the aforesaid features.

To statesman with, Delfi seems to person a respectable ROE. On comparing with the mean manufacture ROE of 8.2% the company's ROE looks beauteous remarkable. This surely adds immoderate discourse to Delfi's decent 16% nett income maturation seen implicit the past 5 years.

As a adjacent step, we compared Delfi's nett income maturation with the industry, and pleasingly, we recovered that the maturation seen by the institution is higher than the mean manufacture maturation of 13%.

Earnings maturation is simply a immense origin successful banal valuation. What investors request to find adjacent is if the expected net growth, oregon the deficiency of it, is already built into the stock price. Doing truthful volition assistance them found if the stock's aboriginal looks promising oregon ominous. What is P34 worthy today? The intrinsic worth infographic successful our escaped probe study helps visualize whether P34 is presently mispriced by the market.