correct. but let's take a look at 2 blue chips.
1. keppel. tell me the PE.
2. st eng. tell me the PE.
of cos u can argue that st eng has a higher PE (two times more in fact) because it dabbles into technology. true, companies that dabbles into tech usually have higher (in fact some have ridiculous) PE. but these are companies that exhibit enormous growth potential, accompanied usually by higher ROI margins. an example would be as you mentioned-silverlake. it recovered from less than $1 to $1.25 in a matter of week. more than 30% recovery. why? because it has stellar ROI margins and very strong growth potential, something that ST Eng doesnt have.
the only thing that is going on right for ST Eng is that they have plenty of contracts in USD.
today got a kum lan person (26 year old with only 2 year experiences in the market but acting pro to give advise in forum)
compare kep corp against STE
say one low PE another high PE
so STE is over valued and Kep corp is cheap
face palm sia..........
noob investor who doesn't even know how to tell between a cyclical business (marine/property) vs a stable dividend counter (recurring maintenance/defense contracts)
the noob keep saying STE high PE and overvalued because no growth......zzzzzzzzzzz
Dividend stocks like STE and telcos have high PE not because of growth, but because of the predictability of their earnings....the stability and years of track record is what gives them the higher PE ratio
example starhub has been paying 20 cents per share for over 6 years.... that's why it trades at PE 20.... investors are comfortable
small cap like valuetronics... low PE and high Yield because its volatility and not proven yet