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Strategies & Market Trends : Value Investing
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From: Paul Senior3/30/2020 4:35:51 PM
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"About POR. How does one learn how to look at a company and estimate what the company would trade in normal economic conditions and expecting a 0% increase in the industry size?"

I like to look at past ten year history. I respect that the totality of all buyers and sellers and their collective opinion, might be a fair represention of what the company might trade for. Considering thouugh that "estimate of what the company might trade for" - that estimate is not a point estimator. It's got to be a range.

So if you look at multiyear history of the company and look at high price and low price for those years, maybe igonore the highest high and lowest low, that would give a clue.

I like to use comparison to median p/e. That is: over ten years, the number that half the time it trades above and half the years on average, below. That kind of factors in the past growth of the company.

For Portland General Electric (POR) the median p/e over past ten years is 18x. The stock's now at 21X.
The stock is overvalued (to me).
What seems to be happening is that people are willing to buy a utility with a good history and some level of assurance that the govenment will not let the company go bankrupt. Versus a lot of companies with maybe better prospects but maybe more risk too in this environment. I'll surmise that POR is an okay place to park money. Otoh, for 21x earnings were I you I'd rather be looking at one of bruwin's picks or something I might know something about as a high schooler - GOOGL? FB? Some gaming stock? POR seems safe enough, but at 21x earnings, it's rich.

All jmo, and I've been wrong many, many times.
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