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Non-Tech : Pep Boys (PBY) Automotive Parts and Accessories

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To: sea_biscuit who wrote (42)10/29/1997 5:59:00 AM
From: Rick Iavecchia  Read Replies (1) of 116
 
As a NUMBERS man PBY really stands out as a great buy RIGHT NOW. At $24.5 per share the stock is at 15 times earnings. Check out the lowest stock price each of the past 5 years and you find this stock bottommed out when the PE ratio was between 14.7 to 18 times earnings. The peaks are routinely between 23.5 and 27.5 times earnings. Frankly I do not believe that PBY deserves a 23 or higher multiple. However based on next years expected earnings of $1.89 (up from &1.65 this year)and assuming a high PE of only 21 times earnings you get a $39 stock price which is a gain of over 55%. Out of 21 analyst who cover this stock, the analyst who is the most pessimistic in his view still expects PBY to have record earnings again next year. I like stocks where the WORST analyst opinion says the co. will make more money next year. You are getting a PBY at a 30% discount to the market with a growth rate that is DOUBLE the market....I warned you I was a numbers man!
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