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
$136.40 |
Change
0.960(0.71%) |
Mkt cap ! $20.81B |
Open | High | Low | Value | Volume |
$136.52 | $137.38 | $135.44 | $36.87M | 270.3K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 178 | $136.37 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$136.40 | 768 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 171 | 135.500 |
1 | 100 | 135.070 |
1 | 30 | 135.000 |
1 | 250 | 134.000 |
1 | 21 | 133.700 |
Price($) | Vol. | No. |
---|---|---|
137.100 | 39 | 1 |
137.180 | 100 | 1 |
137.500 | 847 | 5 |
137.580 | 19 | 1 |
137.890 | 200 | 1 |
Last trade - 16.10pm 28/06/2024 (20 minute delay) ? |
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