PE of Diversified Finance sector companies (As of 30th June 2021)

The Diversified Finance sector in CSE under new classification is not reflecting the true sector PE due to the inclusion of number of non relevant companies. Therefore I have selected 19 finance stocks that are matching with the business in principle and calculated the "Cluster PE" based on the same company list to compare the relative (over) / under valuation of the different stocks based on the calculated cluster PE. 


The below chart demonstrate the calculation mechanism of the said cluster PE for diversified finance companies.


By using the above showed cluster PE I have calculated the individual PEs of 16 finance companies as of 30th June based on trailing 4 quarter EPS basis. Then I have compared the PEs with the established cluster PE and list down the undervalued shares based on the highest degree of undervaluation as per below chart.



I believe the above calculation will help you to identify the relative valuations of each finance sector stock and make it easy to take informed decisions.

Thanks


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