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Strategies & Market Trends : The New Economy and its Winners

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To: Elroy who wrote (26592)	12/13/2005 2:23:09 AM
From: Bill Harmond	Read Replies (2) of 57684

>>Like it or not, price to sales IS a valuation metric It's a metric, and it's clearly important to measure top-line growth and market position in a growth stock...but P/S isn't a good measure for valuation because of the various moving parts on the income statement below the top line. The size and rate of growth of earnings and free cash is what counts. When investors buy a stock they are principally buying a discounted interest in the future bottom line, not the top.

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