lets look at fundamentals, page-5

well if they make circa 50 cents this year and say 55cps next year on 10% EPS growth, then a PE of 14 gives $7.70; If theres a DECENT recovery they could easily make more than 10% EPS growth with all the recent takeover activity
Dont forget its a ASX top50 stock and in boom times it acheives very high PEs because of its domestic monopolistic nature; In bad times, its earinings are somewhat insulated due to being the market leader by far and away in transport - quasi monopoly on our roads really.

its a great stock with a great history and VERY GOOD MANAGEMENT

these acquisitions are all being made now on the cheap, and theyd be businesses that have high returns on equity.

TOL management are the key - theyre positioning themselves now for the recovery and the next boom by making key acquisitions.....and they can afford to do so.

Thats why it can garner a higher than average PE. Transports near monopoly here n expanding overseas now without making huge acquisitions, rather smaller EPS accretive ones with high returns on equity to build future expansion/growth from.