I have actually been preaching for years that you cannot reconcile PHK's SP by PE. It is still a speculative stock and the SP will not have any correlation to this years or next years projected earnings for another few years yet. Eventually that is how a mature company is priced but a stock like PHK is priced on the market consensus as to what earnings might be in 3, 4, 5 years time and the expectations for those figures vary wildly from investor to investor. Due to this fact, nobody knows exactly what the future holds and what the market consensus of all these view might be.
I sympathize with Ed and anybody who likes nice neat calculations and formulas and ANSWERS. I want that too. It is just my nature, but I,m resigned to a few more years of pure speculation first. I am not comfortable with that, it makes me quite nervous and uneasy, but I know that I can't change it so I don't dwell on it.
What Ed and others are saying is 100% correct, except that it is assuming that either the market is does not look beyond 2 years or that it does not expect significantly (possibly, enormously) higher earnings than anything currently projected beyond 2 years. The simple fact is, that the SP IS outlandish based on current and near term earnings and projections. However, the market is factoring in potential scenarios that will make today's earnings and SP look ridiculous and insignificant. There is no nice formula for this, and us numbers people will just have to learn to live with this or sell up because the SP is too high.
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