How cheap can a company get?

greenrookie
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12 years 8 months ago #6833 by greenrookie

How cheap can a company get? was created by greenrookie

Dear forummers, especially those who with experiences trading through multiple business cycles. Just how cheap can a company get, assuming it's business has little danger of going under. I use to think PE of less than 2 is ridiculous, and PEG of close to 1 is already depression price. I know the G in the formula is subjective, but order books and sector growth and historical performance of management should able one to make conservative projection. Can a company actually hits PE or PEG 1 or less than 1???? The market is littered with companies with PEG and PE below 2 some are close to 1, just how low can it get???

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newbiestock
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12 years 8 months ago #6835 by newbiestock

Replied by newbiestock on topic Re:How cheap can a company get?

greenrookie, i share the same thought as u. how cheap can a company get? if there's a stock that is at 1x to 2x PE, with good business outlook and based on the share price, abt 40%-50% are in cash form. what's the risk? I think market is really insane.
i am also sitting on heavy paper loss. But the fundamental hasn't changed to give me a reason to sell. Most companies are still profitable, some riding on growth, some still doing M&A. how can there be a recession? Let's hope the confidence crisis will pass soon...
company still AAA. it's the policymakers not AAA.
funny is when we are buying a stock, we are buying the company, not the policymakers... !!! mkt is really foolish and irrational.
ya.. crisis will pass... !!!

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Joes
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12 years 8 months ago #6837 by Joes

Replied by Joes on topic Re:How cheap can a company get?

newbiestock/greenrookie: We will never know how cheap a good company can get until it happens. When it happens, it will not be a protracted event. It's just a flash in time.

Already, the ridiculous selling is taking place : Wonder who would be panicking to sell at these low prices? Shortists????

Technics at 81.5 cents!!! With a 3-c dividend coming soon...

Eratat at 13.1 cts!!!! PE only 1.7 or there abouts.....

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relaxing
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12 years 8 months ago #6839 by relaxing

Replied by relaxing on topic Re:How cheap can a company get?

US and rest of the world are in much better shape than 2007, especially China and other BRICS countries / ASEAN. Exporters to US/EU will be affected, hence may be good idea to switch to counters with ridiculously low PE and regular dividends. Once the present forced selling is over, it will be difficult to switch.

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yeng
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12 years 8 months ago #6889 by yeng

Replied by yeng on topic Re:How cheap can a company get?

Koon is real cheap at 3X earnings. Just 26 cents.
I am banking on its pre-cast division to pour lots of money into the bottomline. Just look at the HDB building boom -- lots of precast structures needed, right?

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Joes
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12 years 8 months ago #6909 by Joes

Replied by Joes on topic Re:How cheap can a company get?

Can Koon go down to 1X PE?

Has the market ever been this irrational (during past recessions)?

Is it a good thing to just close our eyes and wait for the night to be over?

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