You have a deep misapprehension of value, and how to calculate a business' value if you cannot differentiate the difference between price and value.
The P/e is fundamentally flawed.
Speculators use P/e.
I know a speculator when I see one.
You're not analysing statements of equity or financial performance or cashflows or balance sheets and looking for marginal differences and ratios there.
Instead you try to gauge what something is "worth" by making simplistic historical comparisons. Which is just stupid.
How many companies have you analysed ? Does your x10 EPS work more than 50% of the time ?
Heh.
The ->Business<- creates the _value_.
The Price, creates your _opportunity_.
Do not equate the price somebody pays for something to be its value.
Do not be somebody who answers the following question,
"What is something worth ?"
with
"The price you pay for it."
You are not observing value if you're using P/e.
You are merely observing the price somebody is volunteering to pay as a multiple of a business' earnings per share.
Why isn't ABS trading at $1.94, or $2.39 ?
Because the x10 EPS formula is stupid.
It has a P/e of 2.47 ! Buy it ! it's cheap !
Haha.
I can be much more certain than you because I have much more sophisticated ways to evaluate intrinsic value. When the price of a stock reaches my desired price I buy very meaningful amounts of it.
When you're sitting there paranoid over how the market will trick you this time, I'm buying or selling shtloads of it.
GTP Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
