Shanxi Lu'an Environmental Energy Development Co (SHSE:601699) GF Value Rank : 1 (As of May. 07, 2024)

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What is Shanxi Lu'an Environmental Energy Development Co GF Value Rank?

Shanxi Lu'an Environmental Energy Development Co has the GF Value Rank of 1.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Shanxi Lu'an Environmental Energy Development Co's GF Value Rank

For the Thermal Coal subindustry, Shanxi Lu'an Environmental Energy Development Co's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Shanxi Lu'an Environmental Energy Development Co's GF Value Rank Distribution in the Other Energy Sources Industry

For the Other Energy Sources industry and Energy sector, Shanxi Lu'an Environmental Energy Development Co's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Shanxi Lu'an Environmental Energy Development Co's GF Value Rank falls into.

Shanxi Lu'an Environmental Energy Development Co GF Value Rank Related Terms

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Shanxi Lu'an Environmental Energy Development Co (SHSE:601699) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Other Energy Sources » Shanxi Lu'an Environmental Energy Development Co Ltd (SHSE:601699) » Definitions » GF Value Rank

Traded in Other Exchanges

N/A

Address

North Street, No. 65, High - tech Development Zone, Shanxi Province, Changzhi, CHN, 046204

Website

http://www.luanhn.com

Based in Changzhi City, Shanxi Province, China, Lu'an first listed shares on the A-share market in 2006. As of late 2010, Lu'an Mining Industry Group held a 63.99% stake in Lu'an. Lu'an is mainly engaged in mining, washing, processing and distribution of coal. In 2010, the company produced 33.22 million tons of coals and sold CNY 18.2 billion worth of coal. The company's coal business had a gross margin of 47% in 2010.

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