BM GreenTech Berhad (KLSE:BMGREEN) shares have continued their recent momentum with a 26% gain in the last month alone. The last month tops off a massive increase of 191% in the last year.
Following the firm bounce in price, given close to half the companies in Malaysia have price-to-earnings ratios (or “P/E’s”) below 18x, you may consider BM GreenTech Berhad as a stock to avoid entirely with its 32.4x P/E ratio. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
With earnings growth that’s superior to most other companies of late, BM GreenTech Berhad has been doing relatively well. The P/E is probably high because investors think this strong earnings performance will continue. You’d really hope so, otherwise you’re paying a pretty hefty price for no particular reason.
See our latest analysis for BM GreenTech Berhad
