TER and "valuation" and "to buy, or not to buy" .... most likely based on its P/E ?!
I did a little exercise on TER's declared P/E ratios based on when their TTM Results became public, via their Quarterly or Annual, and what their price was on that day ....
1) Dec.31-2018 :- P/E = 2.41. Results came out on Mar.1-2019, avg. price on that day = ~$41. Therefore P/E om Mar.1 = $41/2.41 = ~17.
2) Jun.30-2019 :- P/E = 2.65. Results came out on Aug.9-2019, avg. price on that day = ~$51. Therefore P/E on Aug.9 = $51/2.65 = ~19.
3) Sep.29-2019 :- P/E = 2.80. Results came out on Nov.8-2019, avg. price on that day = ~$62. Therefore P/E on Nov.8 = $62/2.80 = ~22.
4) Dec.31-2019 :- P/E = 2.74. Results came out on Mar.2-2020, avg. price on that day = ~$59. Therefore P/E om Mar.2 = $59/2.74 = ~21.
5) Latest Results on Mar.29-2020 :- P/E = 3.17. Results came out on May 4-2020, latest average price for TER = ~$62. Therefore latest P/E = $62/3.17 = ~19.
So in the last year and a half TER's P/E has been in the region of 17 to 22. I wouldn't have thought that's an excessive P/E, and nor has there been that much of a variance. It's P/E is now down to about 19.
If we look at TER's price chart :-
Mar.3 '19, P/E = 17, Price = $41.
Aug.9 '19, P/E = 19, Price = $51 .... up by ~24%
Nov.8 '19, P/E = 22, Price = $62 .... up by ~22%
TER reaches a price of about $70/share at the end of 2019, which is a Capital Gain of (70-41)/41 = ~70% in about 10 months.
After COVID-19 :-
Mar. 2 '20, P/E = 21, Price = $59.
May 4 '20, P/E = 19, Price = $62.
So from a P/E "valuation" perspective it seems that TER may not be "overvalued" at the current time. In November 2019 it went up about 13%, in about 2 months, from $62 to $70 when its P/E then was 22.
Buffett's "Equity Bond" approach seems to put TER as a BUY at its current price .....
Of course, in the current "uncertain times", its price may fall further, probably due to no fault of the company's, and those who favour TER may want to "watch and wait" a while ........ |
