High-flier stocks include those with very high p/e, p/b, or PSR multiples. For example, stocks with a price to sales ratio or PSR > 20 can collapse if anything goes wrong with the company, as the valuation already assumes the best possible outcome.
In analyzing high fliers, valuation is everything, yet often difficult, since many are early-stage companies whose prospects are impossible to predict. Factors to consider include demand for the product, competition, and the capability of the company to deliver the rapid growth that the market has priced into the stock. More mature companies can be valued with greater confidence, for example by comparing P/XX multiples with peer companies in the same industry.
The root for this group of short-selling threads is:
Subject 15249 |
