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Non-Tech : SWS - An undiscovered gem
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To: John Chapman who wrote (176)5/7/1999 3:33:00 PM
From: manny t  Read Replies (2) of 504
 
I posted this on the Market Gems thread.

To: Options Jerry (38776 )
From: manny t Friday, May 7 1999 3:26PM ET
Reply # of 38797

SWS,

SWS owns 1.7 million shares of NITE.If the increase in NITE was considered a profit,then SWS would make 1.7 million dollars for
every dollar that NITE goes up.
This translates to 1.7 million divided by 10.7 million (SWS shares outstanding),or .1588785 dollars per share.(1.7/10.7=.1588785)

If SWS depended on the increase in NITE as the only source of "profit",then the price earnings ratio at SWS=55,is 55/.1588785=346.17
If NITE goes up 10 points,the "profit" to SWS would be 17 million.
This would reduce the PE ratio to 34.6.

Therefore a 10 point increase in NITE,increases the "profit" to SWS
by 10 fold.

Can a mathematician figure out what the price of SWS should increase
in order to track the price increase of NITE?
To me it should be at least 2 to 3 points for every point increase in
NITE.

Any ideas?

Manny T

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