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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?


To: E_K_S who wrote (55474)6/16/2015 10:31:46 AM
From: bruwin1 Recommendation

Recommended By
E_K_S

  Read Replies (2) | Respond to of 78715
 
If one uses Buffett's Buy or Sell Price Determination/Consideration of ....

Equity Bond = Pretax Earnings per Share/Long Term Corporate Bond Rate we have :-

TTM Pretax Earnings = $(3077+3840+2823+3114)mil. = $12854mil.
Shares Outstanding = 2710.8mil.
10 Year AAA Corporate Bond Rate = 3.03%.

That gives = $((12854/2710.8)/0.0303) = ~$156/share.

PG's current share price sits at $78.69 << $156, which, according to Buffett, is one of the criteria that could make it attractive as a Buy .




To: E_K_S who wrote (55474)6/17/2015 6:26:44 AM
From: Ditchdigger  Respond to of 78715
 
I appreciate the discussion, interesting. I did find a longterm chart of PG's PE ratio, and it appears it historically trades at a high pe, short of the mid to late 2000's during the crash.
It's growth imo doesn't justify a lofty pe, but then again it's all about the income, ability to pay and raise the dividend.