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The stock prices of Cathay Pacific Gold and Fubon Gold have been falling, which one should you choose for financial stocks? 20 years of Taiwanese stockholders: One reason, I choose Fubon Gold- Today Weekly

Just this week, a classmate in my tutor class asked me:“If you have limited funds, which one should you choose first?”Before I could answer, many students rushed to answer: “Of course it is Cathay Pacific Gold, because its stock price has returned to the 4th prefix.” Gold does have long-term investment value, but this time I found a strange phenomenon: why didn’t Fubon Gold follow Cathay Gold to see the prefix 4?

Changes in the stock price comparison of Cathay Gold and Fubon Gold

It’s not without reason that I think this way, becauseIn the past, the stock prices of Fubon Gold and Cathay Pacific Gold could be said to have followed suit, because both belong to insurance stocks. If there is a systematic risk, the two must fall together. In the past, the status of the two in domestic financial stocks was different. There are advantages. If you look at the overall profit of the company, Cathay Pacific is slightly better, but if it is compared to earnings per share (EPS), it is Fubon Gold.

It is because of this that the rivalry between Fubon Gold and Cathay Gold in the past financial stocks was always in the middle, and it was indistinguishable. However, this situation may change this year.

The stock price trend of Cathay Pacific Gold and Fubon Gold (2010-111 September 17)

Source: Tai Fu Information

The above picture is a comparison chart of the stock price trends of Cathay Pacific Gold and Fubon Gold. We can find that the stock prices of the two gold holdings are really following each other. Not only is the time of the high point close, but there is almost no difference in the place where the stock price low point. By the end of 2010, the annual average price of the two was 42.82 yuan for Fubon Gold and 39.74 yuan for Cathay Gold. The difference was only 3 yuan, and the price difference was less than 10%.

But by the end of 2011, the annual average price of Fubon Gold came to 68.52 yuan, and the annual average price of Cathay Gold came to 53.69 yuan, and the price difference between the two came to 27%. In addition, the stock price of this year has fallen by 36.4% until last week, and Cathay Pacific fell by 37.8%. What happened?

I guess some investment friends will say that the IFRS No. 9 Bulletin’s evaluation of financial assets has resulted in a loss of net worth, and some people will also say that the loss of the epidemic prevention policy has led to the decline of the stock prices of the two companies. These answers are all correct, but my question Yes, why until last week, Fubon Gold has not broken the bottom again, but Cathay Pacific Gold is still breaking the bottom, so that the closing price difference between the two last week has further expanded to 13.7 yuan, a range of 32%.

I guess some people will say: “Because foreign investors sell less Super Fubon Gold and more Super Cathay Gold”, yes, but why are foreign investors so biased?

The key lies in EPS

My opinion is: because of EPS. Fubon Gold’s accumulated earnings per share (EPS) for the first eight months was 7.29 yuan, while Cathay Pacific’s accumulated earnings per share (EPS) for the first eight months was only 3.72 yuan, a gap nearly doubled. Although Fubon Gold is still the king of EPS profit, followed by Cathay Pacific Gold, the gap has widened significantly compared with the previous five years.

Comparison of EPS between Cathay Pacific Gold and Fubon Gold in the past 5 years


Cathay Gold

Fubon Gold


August 111 years ago 3.72 7.29 95.9%
110 years 10.34 12.49 20.7%
109 5.41 8.54 57.8%
108 4.76 5.46 14.7%
107 3.95 4.52 14.4%
106 years 4.47 5.19 16.1%
Data curation: Chen Weitai

Attached table 1 is the EPS comparison between Cathay Pacific Gold and Fubon Gold in the past five years. We can find that in theAfter 109 years, Fubon Gold’s EPS began to widen the gap with Cathay Pacific Gold. I think this is also the reason why the highest price of Fubon Gold can reach 85.7 yuan in the next 110 years, but the highest price of Cathay Pacific Gold is only 68.4 yuan. Bar.

Shareholders should pay more attention to EPS

Going back to the students’ choice of Fubon Gold and Cathay Gold at the beginning, the students intuitively chose Cathay Gold because its share price is relatively low. However, for stockholders, EPS should be more important. The reason is that if the company has EPS, it will pay dividends. Some companies have high net worth, but the assets in their hands will not become EPS (this is the case with many asset stocks). The land and factory buildings have been losing money year after year, and the minority shareholders cannot receive dividends every year. This is not the result we want.

In the value investment theory of investment guru Peter Forest, it is mentioned that the investment value of a company is not only limited to the company’s assets, but also has a more important condition, which is the company’s profitability. If there is no way to generate cash flow with empty assets, then the company has no investment value. This point coincides with the stock god Buffett.

therefore,If funds are limited, although Cathay Gold’s share price is lower, I will still choose Fubon Gold, because this year’s EPS should be larger than Cathay Pacific Gold’s, and the dividends it deserves will be more than Cathay Pacific Gold’s.the above opinions are for your reference, and I wish all investment friends a smooth investment.

About the Author_Chen Weitai

Engaged in the financial and securities industry for more than 17 years, qualified securities analyst, currently the chief investment officer of Zhongying Wealth, CMoney Quanyao Financial Consultant, Financial Editor, and lecturer of the Securities Foundation and Zhongzheng Community University, Today Weekly, Yahoo Wealth Management Column, Business Week Fortune Net special author.

The investment mentality first focuses on the long-short cycle of the overall economy, and combines fundamental stock selection with technical operations; it is believed that “selecting the opportunity to enter the market” is the profit method of stock market investment. At present, there are 2 books: “Trust me, you can’t make enough money”, “Taiwan stock shareholders calendar”.

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The article is in Chinese

Tags: stock prices Cathay Pacific Gold Fubon Gold falling choose financial stocks years Taiwanese stockholders reason choose Fubon Gold Today Weekly

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