Trader, since I evaluate stocks on the basis of fundamentals, I can offer some value based guidelines. First, among the key performance measurements for companies like SanDisk are the relationship between price per share and sales per share, a ratio that gained popularity after many years successful use by Ken Fisher (whose columns often appeared in Forbes). For companies with modest growth in earnings, say, around 10 to 15 percent, a price/sales ratio of around 2 or 3 is not out of line, but on the upper limit of the buying range. For companies in high growth areas, such as SanDisk, a ratio of 8 to 10 would still place the shares in a reasonable buying range. So look at the latest revenue figures for SNDK, and on the price/sales measure you'll see that this stock has at least a 50 percent upward potential on the basis of EXISTING (not future) performance.
Take a look at book value as well, and you'll see that the relationship between stock price and book value is far more reasonable than what you see in comparable tech stocks. I'm not ready to say whether OTHER tech stocks are reasonably priced. I'm only pointing out that COMPARED WITH other tech stocks, SNDK is a true bargain. Draw your own conclusions.
Art |
