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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area

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To: keyners1 who wrote (11207)8/4/2005 11:10:59 AM
From: Crossy  Read Replies (1) of 37387
 
Keyners, re: Amex: HOM
PE is not usable here because the company is growing too much by acquisition thus changing its configuration..

Use Price/Sales ratio instead.. For a firm with HOM's gross margin (35-40%) typically PSR of 1.0 - 2.0 are justified.. then try to gauge next year's sales. Multiply by 2. You get a "targeted" FY2006 marketcap and a target share price..

Check out ServiceMaster's ratios, the 100 pound gorrilla in this business. Service Master is a NYSE listed firm I think.

Right now my calc has it at $3.5-4.0 nearterm target but that is rather lowish and I had no real idea about these granite countertop sales efforts..

rgrds
CROSSY
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