NAN - Market Leader & ASX200 Leader!, page-15

Basically what I'd guess. $122,000 profit, with a few hundred million shares on offer, equals less than one cent of earnings per share. On that metric, Nanosonics looks hideously expensive. (Why pay three bucks for a company that is earning less than a cent, when you can go down the road to, say, Telstra, and pay a bit under double for over fifty times as much earnings?)

But look at the prospect for future growth. On that metric, Nanosonics looks either reasonably priced, or cheap.

The question you need to ask yourself is, are you are a day trader (looking to make a quick profit on the intra-day ups and downs), or a long term investor? If you're a day trader, I have nothing to say to you - that isn't the way I work the share market, and I wouldn't know where to begin to comment. (Note that I'm not saying day traders are inherently bad - only that there is no insight I can make into that side of the market.) But if you're a long term investor, forget about the day to day share price (except inasmuch as a sudden plunge, or a sudden rise, might signal a need to re-evaluate your investment case for the company.) Look instead at the fundamentals, the prospects for growth, the company's execution of its strategy.

In the long run, those are the things that matter - and what will drive the long term price of the share. In the short term, it's all about sentiment: "this company looks good, that company looks bad; sell out of that company and into this company." Sometimes sentiment gets it wrong - and that's an opportunity for somebody who keeps their eyes open and who understands the company.

I think that's what's going on with the current lows for Nanosonics. There isn't much driving sentiment, people are looking at it from a purely numbers point of view, so the price is depressed relative to what I would consider a fair price. Which, to me, makes it worth buying more (if I had the cash, which I don't. Sigh.)

But that's my opinion. Always remember that an opinion, on the Internet, is worth no more than you paid for it. Think about it, by all means, but don't just take it as gospel.