sp ?, page-10

Hey octain, i think dividends and eps is irrelevant when u value a company.What's important is retained earnings and r.o.e.... i.e "If" your talking about asx listed companies other than property type plays; as r.o.e is very low in lpt's and the best that property type stocks can do is pay a dividend via their cashflow rather than debt funded dividends and of cause mining type companies who rely on shareholders for new funds and yet they promise that drilling results are a positive but yet no profits are generated in any given year via their track record.Now this is regarded as more of a speculation type stock as it becomes very difficult to value the company as a whole.

The trap ceo's and management fall into, is they believe that if a dividend is paid to shareholders, it will prevent them exiting their position.This option is more regarded as a fear option by management i.e companies should be paying dividends where appropriate.

Companies with very high levels of r.o.e should be retaining the majority if not all earnings with a view to increasing profits in future years.The ability to use retained earnings wisely is a sign of good company management.If the company management cannot do any better with earnings, then he/she is better off if the company pays you the shareholder the full amount in dividends.

Each dollar retained by the company should produce at least one dollar of market value. But if your talking about asx listed companies other than property type plays, which in most cases need to pay out earnings to their shareholders in way of dividend; i would be looking at companies that know how to use profits accordingly.

Remember any company can come out and tell shareholders that their e.p.s has increased this year and every year,tricks that are used by companies can be indirect increase via share buy back methods.Other than my cer investment, i have held some stocks which have performed well due to high levels of r.o.e, but i don't look for this in lpt type stocks as n.t.a. cashflow and heaps of other data available thru companies annual report should be looked at for property type plays.

Finally people wonder why the sp is not at a certain price level.The answer to that is "If a business does well, the stock eventually follows."