Guy: But what if PE never catches up? Correct me if I'm wrong, but PRST net gross this past quarter was 12 million, up from 10 million the previous quarter, and up from 2 million the previous year. Now this is certainly respectable, but not anywhere near what the stock price would lead one to believe. At this rate, if PRST's stock price stays unchanged, it would take 5 years for the PE to fall to 20, which is a virtual millenium when it comes to high tech (5 yrs. ago we were still in awe of the revolutionary 386 Intel chip! and Apple was still king!). The competition must be working night & day to come up with matching technology, and they may have deeper pockets. I'm just afraid that todays mid-day 10% drop in PRST is just a harbinger of things to come --when the fall comes, it may be brutal and without escape. To paraphrase Motley Fool's lunchtime comments, easy come, easy go.
P.S. I think you may be mistaken --in four months NN's PE FELL to 15-20 from 200 because the stock price IMPLODED, and just because earnings began to plateau. Believe me, I should know --I was one of the small fry left holding a virtually flat bag!
Gary
>I believe PRST will be the same way. This stock will keep going up as long as the expectations of earnings are there. But once this incredible growth in earnings has materialized then expected growth will be lower and that will mark the top in this stock. I believe once the PE is low then that is the time to sell this stock. |
