I suspect that given all the economic signals and Trump/China , Brexit and European weakness you will find many smaller businesses trading on single digit pe's. Its not comparable but CAJ is 22.5c earning 3.5c and paying 1c fully franked basiclly if you take into account franking exactly the same as here. That share seems to have stabilised as well , new management yet it has been soft at 6.45pe...
I think that the bubble that is bursting lies in high PE businesses that are not showing the eps growth they could produce in the past. That to me is the basis of the fallout right now. Look at RHC - 2% growth in EPS - not enough to justify above 20 PE. Share goes up and after a few hours reality sets in and down it goes.
Personally I think that is where we are going to have to get a reset. Can wework actually make a profit or Uber ... At some point they have to grow profits not just reduce losses or in some cases increase losses but increase revenue...
I think that the good thing for smaller companies will be low debt and stable earnings and dividends. IsACF worth 31c with this patchy result? That is the question for me. My conclusion after the third read is no , I am happy with my average which is now around 28/29c but think that I may be able to buy lower down in next 6 months.
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