Let say now I realize the company raffles medical group ltd that I bought few months ago(before I join investment quadrant) met both the requirements for business and management quadrant but has failed 2 of your financial quadrant checklist(ROE and gross profit margin) is it wise to give the company benefits of doubt or consider cutting loss by selling the stock straight away?
Cause from my understanding the decrease in ROE and gross profit margin is mainly due to their hospital expansion in china(which require large capital) and increase direct labor costs(the need to quickly hire medical professionals).
Hi Jun Song,
Sometime, the company financial may be down for a few years because the company is investing for the future and it may take time for the result to improve.
Even if the company financial is down like raffles medical due to investing for the future, you still can make a profitable investment out from it. Assuming that the business and management are intact. The last key is whether did you pay the right price which buffer all the possible risk of Raffles medical.
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