"On any conventional valuation, FLN is vastly overpriced. The $470,000-odd NPAT equates to earnings of 0.1¢ a share, which means that at 50¢, the stock was priced at 500 times earnings. When it hit $1.80, the price/earnings ratio blew to 1800:1 – an astronomical p/e we haven’t seen since the dotcom boom 14 years ago.
"And it won’t improve. The prospectus says FLN will reinvest strategically and concentrate on long-term growth at the expense of short-term profits. Directors don’t expect to pay dividends “in the foreseeable future”.
"Maybe some of the frenzied buying has been from big IT competitors seeking a toehold in the stock. If you know that’s happening, hold. But if you’re a retail investor, only mad gamblers could buy at these prices." ____________
So, if the share price gos to $1, the PE/r will be 1000! Toot toot?
At least the early investors made stacks of money, and good for them- not easy to do in these markets. For late arrivals, though, many tears might be shed.
FLN Price at posting:
$1.09 Sentiment: None Disclosure: Not Held
