Not sure how people are valuing this company? My guess is people are valuing with the ROCE staying near 60% forever and the company will reinvest for growth based on that return which is lethal. operating margins of 42% will start coming down to industry average sooner rather than later and growth will come down to the global economic growth or nominal growth of local ccy within next 5-6 years.All these factored in will result in a much lower value for the stock and if we are true to the value investing principles and our goal is to buy a mispriced assets(with enough MoS ) in realtion to value and sell asset when price exceeds the value then its a no-brainer call. If value investing premise is based on valuing a firm by converging the numbers with the business economics, “hope” investing is valuing the company based on numbers that exist only on your wishful dreams and with little economic sense.
Disclosure:Not invested
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