Since early May, CapitaLand share price experienced some form of bearish correction. But the stunning announcement of the retirement of CEO Lim Ming Yan on 1 June 2018 really knocked the wind out of CapitaLand share price, which collapsed from a high of almost $3.80 to $2.99 at one point. CapitaLand share price has since recovered to $3.15 level but remained under pressure.
With Price/Book Value of just 0.692 and P/E ratio of merely 9.7, CapitaLand share price is currently considered very undervalued among the blue chips. In fact, most investors perennially misunderstood this stock and thought that the property cooling measures would wallop CapitaLand share price upside down. But they don’t realize that the battle to be fought for CapitaLand is not in Singapore.
Since the Great Financial Crisis, CapitaLand share price had been languishing between $2.00 to $3.00 bandwidth in recent years, a shadow of its former self when it was trading at $8.00 in the heydays of 2007. The recent carnage in CapitaLand share price even triggered a massive shares buyback by management, which bought back $209 million worth of CapitaLand shares. The intervention managed to prevent a massive decline in CapitaLand share price and provided a critical support for CapitaLand share price.
Perhaps a victim of its own success, most investors may prefer to invest in CapitaLand’s Reits than the parent company shares because the former offer higher yields and are relatively less expensive than CapitaLand share price. In this regard, does CapitaLand share price currently offer value for money or is it a value trap? In this article, I will share my views on the factors that may cause CapitaLand share price to rocket in the coming months.
CapitaLand share price to fall or rise?
At the centre of the storm is the stepping down of the CEO after just five years in the job. At the tender age of only 55, CEO Lim Ming Yan is considered too young to retire and smell the roses in Singapore. Furthermore, Lim Ming Yan became the Group CEO only in 2013. There should be more time for him to prove his leadership as CapitaLand is a very complex organization to manage.
With global portfolio worth $91 billion spanning across 150 cities, CapitaLand has evolved into a real estate behemoth with diverse portfolios in shopping malls, serviced residences, offices, homes and real estate investment trusts (REITs). Although size matters in real estate, CapitaLand share price has been sluggish for far too long.
Perhaps shareholders had seen enough of CapitaLand share price performance. When CEO Lim Ming Yan took over the helm, CapitaLand share price was [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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