The Kansai Electric Power Company, Incorporated (TSE:9503) shareholders that were waiting for something to happen have been dealt a blow with a 26% share price drop in the last month. To make matters worse, the recent drop has wiped out a year’s worth of gains with the share price now back where it started a year ago.
In spite of the heavy fall in price, Kansai Electric Power Company’s price-to-earnings (or “P/E”) ratio of 5.9x might still make it look like a strong buy right now compared to the market in Japan, where around half of the companies have P/E ratios above 14x and even P/E’s above 22x are quite common. Although, it’s not wise to just take the P/E at face value as there may be an explanation why it’s so limited.
Kansai Electric Power Company could be doing better as its earnings have been going backwards lately while most other companies have been seeing positive earnings growth. The P/E is probably low…
