P/E 30 Ratio

  

See: P/E 10 Ratio.

So if you know what a P/E of 10 is (slow growing company, lots of risk, lots of negative vibes about it), then what's a 30?

Like...30 is a very high multiple. For a dollar of earnings this year, you're paying $30. You must be expecting enormous growth. So if that's the case, then what does it mean? Well, it means the company has a new technology that cures something that ails rich people. It means that the company has a new method of reducing the number of clicks it takes to find, um, art films. It means that the company is doubling revenues every 2-3 years, maybe increasing margins. Generating a lot of cash.

Very high multiple for very high expectations.

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Finance: What is a value investor?1 Views

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Finance allah shmoop what is a value investor Well of

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value investors and investor who buy stocks that she believes

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have quote hidden unquote value That little wall street just

00:13

isn't appreciating So uh aren't all investors value investors Well

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kind of yes And really no value investor Generally speaking

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in this context waits until a stock with good core

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assets stumbles The company falls on short term hard times

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and maybe quote should unquote traded twenty bucks a share

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But wall street was angry and disappointed and hurt that

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the company grew revenues only seven percent instead of the

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expected fifteen percent for a quarter to and the streets

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sold down the stock from eighteen to seven Well the

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proverbial baby is thrown out with the bathwater And well

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at this point the value investor steps in and buys

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the stock big They hold the stock it's a tte

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seven box The company slowly fixes itself in the stock

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price gradually creeps upward back to that eighteen figure And

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then the value investor likely sells the stock when it

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goes from cheap to being fairly priced like you know

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back in that eighteen twenty dollars target price kind of

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thing Yeah that's where it was supposed to be earlier

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all else being equal Well the normal cycle would then

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have the value investors sell those shares to a growth

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or mo mentum investor Who's credo is more like buy

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high sell higher versus the you know value investor who's

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all about by low then sell when fairly price that's

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like benji graham Look him up it's not a sexy

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but you can make big bank in value Land just

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