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QuestionsCategory: Valuation QuadrantWhat is the rule of thumbs for relative valuation methods in a Clothing Industry?
Thomas asked 6 years ago

Hi,
I would like to know, in your opinion, what is your rule of thumbs in determining whether a local apparel store with overseas expansion (i.e. such as Padini Holdings Bhd) is undervalued, fairly valued or overvalued using relative valuation models such as P/E ratio, PEG ratio, Price-to-sales and P/CF ratio?
Regards,
Thomas

1 Answers
Victor Chng answered 6 years ago

Hi Thomas,  
 
I generally don;t invest in apparel business due to their fast changing trend in fashion which may cause them to obsolete if the company is not fast in spotting trend. Another risk for such business are their rental cost which are always increasing. If I may put into valuation, I prefer to buy a well known brand at PE12x or less

Thomas Chua replied 6 years ago

Hi Victor,

Thanks for your insights :)