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Stocks on Low P/E's (PER)
PapalPower
- 14 Aug 2007 01:17
Please suggest any stocks that are currently on Low P/E's for the current and forward figures :
Rules for suggestion :
1/ Current year PER (Price to Earnings Ratio) of less than 12 times.
2/ Foward (next year) PER of less than 10 times.
3/ Market cap of over 10m GBP.
4/ No Profit Warning or similar bad news in the past 9 months.
5/ Pls indicate if the company has debt and what their cash in bank position is.
6/ Pls indicate whether they are presently cash flow positive from operations.
7/ Pls include the latest broker forecasts and all other information in the suggestion.
*** Things to remember as the P/E ratio can be misleading ***
a/ Stocks with low a P/E might have very high debt levels - which can be crippling.
b/ Stocks with low a P/E might have had recent bad news, still being/to be priced in.
c/ Stocks with low a P/E might be suffering bad sentiment due to ongoing issues/problems/past problems/projected future problems.
d/ Is the company "cash flow positive" from operations, if not then it means they are draining away their cash presently.
e/ You need to balance for yourself the debt/cash/cash generation aspects, this is the key to finding the stocks that could/will "please" the markets, and those that will remain "unloved".
f/ A company with a significant amount of cash in the bank has a lower EV weighted PER than the headline figure, if you work out EV (Enterprise Value), which is market cap minus cash, then work into that the earnings figure. (In the above chart both MWE and RCG have significant cash balances and so their EV PER is lower than the headline figure above, however, this again needs to be weighted against cash flow positive or negative from operations i.e. is the cash lump sum growing, or being used up ?)
Rules for suggestion :
1/ Current year PER (Price to Earnings Ratio) of less than 12 times.
2/ Foward (next year) PER of less than 10 times.
3/ Market cap of over 10m GBP.
4/ No Profit Warning or similar bad news in the past 9 months.
5/ Pls indicate if the company has debt and what their cash in bank position is.
6/ Pls indicate whether they are presently cash flow positive from operations.
7/ Pls include the latest broker forecasts and all other information in the suggestion.
*** Things to remember as the P/E ratio can be misleading ***
a/ Stocks with low a P/E might have very high debt levels - which can be crippling.
b/ Stocks with low a P/E might have had recent bad news, still being/to be priced in.
c/ Stocks with low a P/E might be suffering bad sentiment due to ongoing issues/problems/past problems/projected future problems.
d/ Is the company "cash flow positive" from operations, if not then it means they are draining away their cash presently.
e/ You need to balance for yourself the debt/cash/cash generation aspects, this is the key to finding the stocks that could/will "please" the markets, and those that will remain "unloved".
f/ A company with a significant amount of cash in the bank has a lower EV weighted PER than the headline figure, if you work out EV (Enterprise Value), which is market cap minus cash, then work into that the earnings figure. (In the above chart both MWE and RCG have significant cash balances and so their EV PER is lower than the headline figure above, however, this again needs to be weighted against cash flow positive or negative from operations i.e. is the cash lump sum growing, or being used up ?)
PapalPower
- 13 Oct 2007 02:58
- 25 of 25
Updated with :
UVEL forecasts added.
GETM added.
UVEL forecasts added.
GETM added.
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