Thanks for the link. But why do you compare Linde, Air Products and Shin-Etsu? I haven't done any more research, but Shin-Etsu is only marginally (if at all) active in industrial gases. As far as I know, the 4 big players are Linde, Air Liquide, Air Products and Nippon Sanso. If I remember correctly, these 4 account for more than 90% of the market among themselves. I know Shin-Etsu mainly as a manufacturer of hyperpure silicon wafers; i.e. the raw material for chip production. Personally, I think Linde is a strong company, but unfortunately it is also very expensive. That's why I decided to invest in Air Products a year ago. Here, I will probably also add again.
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@RealMichaelScott What makes you think that Linde is currently expensive?
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@Pezi Well, there are certain ratios for sales/EV, to name just one. The P/E ratio and the market capitalization are also not exactly low. I agree with him
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@Pezi I don't have everything in my head now and only remembered that the P/E ratio is significantly higher than that of the competition. Whether it is already highly valued is another matter, but the fact that it is below the average P/E ratio makes sense given the current high interest rates: Interest rates high -> P/E ratio down So it is clear that the P/E ratio is currently somewhat lower than in the zero interest rate phase.
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@RealMichaelScott
...isn't it exactly the other way around? If interest is no longer earned on credit balances, shares and other financial investments automatically become more attractive, as there are still returns to be had here. A higher attractiveness of shares leads to a greater willingness to buy even "expensive" shares. Air Liquide, Linde and Air Products are all between 25 and 27 from the P/E ratio, i.e. very similar.
...isn't it exactly the other way around? If interest is no longer earned on credit balances, shares and other financial investments automatically become more attractive, as there are still returns to be had here. A higher attractiveness of shares leads to a greater willingness to buy even "expensive" shares. Air Liquide, Linde and Air Products are all between 25 and 27 from the P/E ratio, i.e. very similar.
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@Pezi no, unfortunately not. It's just the opposite: the lower interest rates are, the more capital flows into the stock market, because that's where the money generates a return. The higher interest rates are, the more money is put into "safe" investments such as bonds or time deposits. Why? Stocks are a risky investment and the inverse of the P/E ratio can be seen as the "expected return". With a P/E ratio of 20, the expected return is roughly 1/20th, or 5%. Bonds and interest rates are risk-free assets. The higher the interest rates are the more attractive these investments become, because there you get the return risk-free. For a detailed explanation I am so free and link a post of mine on this topic: https://getqu.in/JINEKJK5UV51/l2PNEr2MrN/
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•@Pezi I don't know how you arrive at a P/E ratio of 25 for Linde, according to seekingalpha we are currently at 43.7 according to GAAP. The forward P/E ratio according to GAAP is just under 30.
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1Yr
@RealMichaelScott right, thinking error 🤦🏼♂️
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