Agree on the overvalued part. Although, I would think that most technology companies would trade on a price/sales multiple of at least 3 as they usually operate on high margins.
To illustrate my point. A stock with a 20% margin trading on a p/s multiple of 3 would therefore trade on a p/e of 15 (3/20%). Given these companies tend to have good growth prospects and ability to translate a high portion of their earnings into free cash flow that's a pretty conservative valuation.
Conversely, a P/S multiple of 3 might be high for low margin low growth business. For example a 5% net margin stock trading on a p/s of 3 would equate to a p/e of 60 which unless they have incredible growth prospects if expensive.
ASX is the ultimate example of a high margin business. It trades on a price/sales multiple of 10 and I think it offers pretty good value at present.
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Last
$137.90 |
Change
2.540(1.88%) |
Mkt cap ! $21.05B |
Open | High | Low | Value | Volume |
$136.55 | $138.23 | $136.00 | $33.76M | 245.9K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 598 | $137.39 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$137.99 | 725 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 598 | 137.390 |
1 | 1026 | 137.370 |
3 | 1929 | 137.240 |
1 | 164 | 137.180 |
1 | 509 | 137.100 |
Price($) | Vol. | No. |
---|---|---|
137.990 | 725 | 1 |
138.000 | 1051 | 4 |
138.050 | 164 | 1 |
138.070 | 1 | 1 |
138.150 | 725 | 1 |
Last trade - 16.10pm 15/08/2024 (20 minute delay) ? |
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