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PE has no relation ship to cash !!

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Kikker1959

10,778 Posts.

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20/02/16

08:55

Post #: 17071273
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Originally posted by BananaRepublic1 ↑

PE is an efficiency ratio that applies to mature companies. The shorters will say high PE companies (ie. Companies that are generating high revenue but also high spend, therefore less cash per share for the shareholder) are a sign of a lazy company and ripe for the burn. And they do, often. Shorting a stock should be illegal.

Bit essentially if you are a growing company it makes sense to spend every dollar you make to try and increase your market share. Hence a high PE ratio, because there isn't much cash left in the bank.

Tech, health, bio, food, they all have high PE. If you are able to create a domestic market like the big four banks in austrlao where you know you're secure, maybe you'll try and cut costs and make more from less, lowering the PE.

BFC / A2M / BAL aren't those companies yet.

I also still hold significant reservations about bfc (see my previous posts). As soon as I break even I'm out of here.

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PE has no relation ship to cash !!

BFC Price at posting: 47.5¢ Sentiment: Buy Disclosure: Held
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