Bob, Don, Neil:
Thanks for all of your input. I appreciate your tolerating my neophyte status.
I've pursued this PE thing a bit further, trying to compensate for forward vs. trailing earnings, different fiscal years, and so forth. I've gone to the semi equipment/materials group of Silicon Investor (Klic's group) and searched for all of their PEs on Yahoo. I figured retrieving this information for such a large group should give a superficial idea of Klic's relative valuation. Here are my results:
1. There are 47 companies in the group of which 35 indicated a PE.
2. The entire reporting group has an average PE of 37.99 [standard deviation (SD) = 37.0, standard error (SE) = 6.41, range 6.7 - 178.1]
3. The large SD indicates outliers and a graph showed the higher numbers (100+) were skewing the data. Eliminating the 100+ numbers (n=4) produced the following: mean = 26.23, SD = 16.3, SE = 2.9. This still is quite a large SD.
4. If the next 3 PEs are eliminated - all above 60 - we are left with: mean = 21.9, SD = 9.8, SE= 1.8 (n= 28).
Using the calculations with the highest cluster of observations (#4), Klic's PE (11.49) remains 1 of only 3 companies in this group whose number falls below one standard deviation form the mean (caveat: although #4 is likely to be the most appropriate set, it is also the only one the sets Klic outside the first SD - a bit of a Catch-22).
There are other measures attainable through Silicon Investor's sorting procedure that underscore the apparent low valuation. |
