I happen to own shares in a discount retailer (AMES) with 300 stores, over $2.3 billion in sales, an ROE of close to 30%, increasing net margins, AND a web site to sell records, Amesmusic.com. The company is quite profitable, ($35 mil. last year ended 1'98). EPS this year, (1/99) have a consensus estimate of $1.61, up from actuals of $1.46. The issue was favorably mentioned in thestreet.com two weeks ago, and yet the company is selling at 21 1/4, with a forward P/E of 13.2X 1/99 projected EPS. AMES has a miniscule price-to-sales ratio of 0.22, and with insiders holding only 0.2% of the shares, could even be considered an acquisition candidate. For the life of me, I can't figure out why this one isn't getting any better notice from the marketplace. Perhaps the market is too busy with the high flyers, and the daily returns of +/- 10%. It indicates to me the effect of the "herd instinct", overlooking sound value plays, to bid up already overly-inflated prices of potential pie-in-the-sky dreams. Oh well, just remember the higher they fly, the further, and faster), they fall.
Hey Stockmarket! - That's AMESMUSIC -- DOT COM
The above is not a recommendation to either buy or sell the shares, but only a glaring example of how some companies seem to get ignored
and passed by with the running of the bull herd. Astonishing.
MT |
