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Rating Change Detail - UNITED OVERSEAS BANK LTD. (ADR) (UOVEY) - 7/2/2009
The stock was downgraded from Strong Interest to No Interest on 7/2/2009 by the P/E/Growth Investor Strategy based on the principles of Peter Lynch. The score according to this strategy fell from 98% to 7%. A full detailed analysis of UOVEY using this strategy is included below. For a full detailed analysis of UOVEY using 12 proven strategies of Wall Street Legends, take a free trial to Validea.com

Detailed Analysis of UNITED OVERSEAS BANK LTD. (ADR) (UOVEY)

Strategy: P/E/Growth Investor - Based on: Peter Lynch

DETERMINE THE CLASSIFICATION:

According to this methodology, UOVEY is a "Slow Grower", based on its single digit earnings growth of 7.01%, based on the average of the 3, 4 and 5 year historical eps growth rates.

SALES: [PASS]

UOVEY would fall into the "Dividend Payers" category according to this methodology. The first requirement of a Slow Grower is that its sales exceed one billion. UOVEY's sales are $4,495 million. It passes the test.

YIELD COMPARED TO THE S&P 500: [PASS]

This methodology also maintains that the Yield of a "Slow Grower" should be high, which includes being higher than the S&P average (currently 2.89%), and at least 3%. This yield is required because dividends are the main reason for investing in "Slow Growers". The yield for UOVEY is 5.40% so it passes this test.

YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: [FAIL]

This methodology would consider the Yield-adjusted P/E/G ratio for UOVEY of 1.02, based on the average of the 3, 4 and 5 year historical eps growth rates, to be unacceptable. This criteria is the most important one in the methodology and a failure of it will automatically result in a 0% score for the overall analysis.

TOTAL DEBT/EQUITY RATIO: [NEUTRAL]

UOVEY is a financial company so debt to equity rules are not applied to determine the company's financial soundness.

EQUITY/ASSETS RATIO: [PASS]

This methodology uses the Equity/Assets Ratio as a way to determine a financial intermediary's health, as it is a better measure than the Debt/Equity Ratio. UOVEY's Equity/Assets ratio (9.00%) is healthy and above the minimum 5% this methodology looks for, thus passing the criterion.

RETURN ON ASSETS: [PASS]

This methodology uses Return on Assets as a way to measure a financial intermediary's profitability. UOVEY's ROA (1.01%) is above the minimum 1% that this methodology looks for, thus passing the criterion.

FREE CASH FLOW: [NEUTRAL]

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for UOVEY (2.04%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

NET CASH POSITION: [BONUS PASS]

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for UOVEY (34.43%) is high enough to add to the attractiveness of this company.

For a full detailed analysis of UOVEY using 12 proven strategies of Wall Street Legends,
take a free trial to Validea.com

Rating Change Detail - UNITED OVERSEAS BANK LTD. (ADR) (UOVEY) - 7/2/2009

Detailed Analysis of UNITED OVERSEAS BANK LTD. (ADR) (UOVEY)

Strategy: P/E/Growth Investor - Based on: Peter Lynch