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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: ItsAllCyclical who wrote (185412)2/20/2009 8:10:07 PM
From: PerspectiveRead Replies (1) of 306849
 
They are carrying $1.4B in debt, which I thought might become an issue in the future. They'll be lucky to do $1.00 EPS this year, so they're at 13fPE. With no book value to support the stock price, and a relatively high PE for a brokerage on a historical basis, I thought they could go a lot lower.

Now, I do see that they have fantastic margins. I didn't realize that fully half their revenues flow straight to operating income. However, I think that once J3P adjusts to the concept of a secular bear market, trading volumes are going to absolutely vanish, and with it their revenue streams.

I guess time will tell. After seeing your post, I'll probably be a little quicker to cover 'em. Those margins are thoroughly impressive. The real question will be if they can cut costs quickly enough to keep them there when revenue gets cut in half.

`BC
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