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Strategies & Market Trends : Value Investing
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To: Kauz who wrote (45478)11/16/2011 12:18:54 AM
From: Paul Senior   of 78745
 
EDAC. It seems like the person is putting a trough p/e (which is a high number) on peak earnings for a company in a cyclical sector. That is, at trough when price is low and earnings are minimal, p/e is relatively large. When earnings are large in future, people have anticipated this and then anticipate earnings level won't be sustained, so p/e is often is relatively low when comparing that p/e to the company's historical p/e.

Maybe it depends on your view where we are in the cycle. Stock has already moved up quite a bit from lows, so it's not like people aren't expecting good things soon from the company.

finance.yahoo.com


"I'm completely confident of my $15 price target by April". Confident of a target yes. Confident that the target can be achieved in the time frame, that is hope. We're talking about a small company where unforeseen events can really affect it. Plus the volatile stock market in general.

No intent to dissuade you from buying the stock, Kauz.
I am betting on the growth of aerospace -- both commercial airliners and private planes -- and I've bought and am holding stocks related thereto, as I've said. So in a sense, if the EDAC company does well and its stock moves up further, I expect that some of my stocks in this sector will be doing okay too.
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