factFINDER wrote:STOCKS Classified under Diversified Holding Sector
Sector Classification is important as we usually compare SECTOR PER to decide Undervalue or Overvalue statues of a particuler stock, as those are more representative than MARKET PER.
What my observation was some stocks classified under DIVERSIFIED HOLDING SECTOR has not been much diversified, which is sometimes misleading.
The classic example is FLCH (Free Lanka Capital Holdings) .... 97% Revenue & over 90% profits from PLANTATION business. Then, is it Diversified Holding Company or Plantation Holding Company (like MPRH)??
If Sector PER
Diversified = 24.5
Plantation = 9.8
and FLCH = 10.9 -- Is is undervalued?
I have not analysed all other Diversified Stocks, but noticed that some other stocks classified under diffrent sectors having relatively more diversifications. i.e. DIST, LOLC, CIC, GREG, .... etc.
Experts ..... Should there be any criteria to classify stocks??
Decleration : This is not a negative comments on FLCH. I have FLCH in my portfolio and still worth to me at current level of 5/- (as it is the IPO price)
You are absolutely correct in pointing out this. However, one thing about the CSE and the PLC's are that they are perpetually in a state of evolution. Today they are Finance Companies and they next day they are into Palm Oil Plantations. One is a Hotelier and then they do the job of an Investment and Fund Manager by investing in the CSE with the monies of share holders who originally invested in the Hospitality Sector. These people do not stick to the articles of association at all. Who checks these things, huh?