T, Well, pe ratio is just one measure. For cyclical cos., the tendency is to carry big PE ratios when business stinks and low pe ratios when it is good. Hence, the energy situation. Many financials also have relatively low pe ratios, but I think they are more likely to be over than under valued.
Here is where I see cheapness: Many metals cos. are cheap. North American Golds are selling at high pe ratios, but I don't think they are pricey. And South African golds are still cheap by any standard. Tie and Rti have had runs, but they are nowhere near previous cyclical highs. They have no earnings, yet, so the pe ratios are NA. Many closed end funds are cheap, especially the foreign funds. They are selling at big discounts and cyclically low prices for the stocks in the portfolios. Biotechs are not cheap by many measures, but if one has a hot product likely to hit in the next year or two, there is money to be made. It is almost impossible to value a co. that has nothing and MAY have something. The main thing is not what it is worth if it happens, but the probability of it happening. Since that is a tough game, many bios are under priced and many are over priced. I just wish I was better at separating them. <g> |
