Let’s revisit this discussion from June 2020. To @smallcapvaluefind analysis of PFC, everyone here was quoting it’s a value trap without understanding the real meaning of value trap (on value pickr at that!!)
Most of us were saying value trap for it because the stock was not moving and now see where it is!! But the fact is that if you just ignore the stock and see the fundamentals, you see a company with a historical 10 year ROE of 16-21 percent which has 5xed its profits in 10 years!! Such a company cant be value trap. A value trap is a company with good looking financials but no growth (or degrowth), which cant make use of the money it earns (might end up being used in things necessary to keep company running!!) and doesn’t give it as dividends either!! Not a company that is doing both, giving dividends and growing its profits!!
The fact is that it was never a value trap at all!! Even those who were stuck in it as a value trap were making 8 percent cagr+ due to dividend alone!! How is that a value trap? And it was also growing fundamentally
Sometimes we miss the obvious growth happening fundamentally because we are stuck seeing a cyclical stock price chart!!
Some shameless self-promotion
https://twitter.com/Shubham45856917/status/1472918992742277128?s=20
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