FMD. Value is iffy, imo, because of lack of operating history (public history).
I'm usually against buying companies with high p/sales, p/bk. And this stock is VERY high on both.
These metrics have to be put in some perspective. There are always exceptions. For one, p/bk might not be such a good measure for financial companies like FMD. Secondly, it's not so much about p/bk, but what can the company earn on that book value? Here we have very high ROE (51%) per Yahoo. Perhaps too high to be sustainable.
Given a very high ROE, the next issue is, what would I be willing to pay for it? Based on the metrics I use, I'm willing to buy at current price.
I'm one who will also use profit margins as an indicator too. And here we have very high profit margins, so to some extent a high p/sales number is justified. (The 41% profit margins reported by Yahoo are likely not sustainable at such a high level though, I would guess.) |
