Global Logistic Properties Ltd’s Share Price Is Up By 57% In The Last 12 Months. Here’s Why.
Global Logistic Properties Ltd (SGX: MC0) or GLP is an owner and developer of modern logistics facilities. It has operations in four countries, namely, China, Brazil, Japan, and the US.
In the last 12 months, the company’s stock price surged by 57%. In this article, we will try to understand what might have caused the surge.
Reasons for the surge:
There are many reasons that could cause a stock price to move. Generally, stock price movement is driven either by business performance or investor’s sentiment.
The former is related to how a business performs in a given period by looking at metrics such as growth, margins, production and others. Here, the ultimate driver is profit.
The latter is driven more by investors’ overall mood, which is described by emotional pairs such as greed and fear, optimistic and pessimistic, bull and bear etc.
In this case of GLP, I believe both reasons have contributed towards the increase in share price in the last 12 months.
Let’s look at some figures to justify the first reason.
Source: GLP Full Year 2017 Result Release
From the above, we can see that all the metrics performed strongly in FY17 when compare to the previous year.
Furthermore, investors are currently in an optimistic mood because of a possible takeover.
In fact, GLP recently announced that it has received firm proposals for a takeover from shortlisted bidders for final evaluation.
Clearly, the positive business performance and the potential for takeover has propelled GLP’s share price higher in the last 12 months.
Yet, investors should understand that there are no guarantees that a takeover will materialise, since it is dependant on the outcome of the evaluation.
Thus, if the takeover fails to materialise, there is a risk that GLP’s share price might give back some of its gains in the last 12 months.