Jeffrey, I don't know that MAT deserves a pe of more than 10-12. But then again, I'm one who has trouble paying more than 12 pe for any stock. Don't mean to be a relativist about it, but I do want to invest. So I have to, I think, relax absolute standards sometimes to try to get what I think will work in today's/tomorrow's environment.
The way MAT jumps around on earnings, I'm more comfortable going with price to sales. If sales can hold steady or continue to rise as they have in past years, MAYBE there's a shot they can bring some profits in. (With the franchise and dominance MAT has, they ought to at some point earn some decent money and/or return to investors' good graces.) For MAT, the PSR is generally about 1.4, sometimes 1.9 or higher (yearly average). So at psr below 1.0 now, there's lot of potential (imo) for this stock to move higher. |
