Agree on the overvalued part. Although, I would think that most technology companies would trade on a price/sales multiple of at least 3 as they usually operate on high margins.
To illustrate my point. A stock with a 20% margin trading on a p/s multiple of 3 would therefore trade on a p/e of 15 (3/20%). Given these companies tend to have good growth prospects and ability to translate a high portion of their earnings into free cash flow that's a pretty conservative valuation.
Conversely, a P/S multiple of 3 might be high for low margin low growth business. For example a 5% net margin stock trading on a p/s of 3 would equate to a p/e of 60 which unless they have incredible growth prospects if expensive.
ASX is the ultimate example of a high margin business. It trades on a price/sales multiple of 10 and I think it offers pretty good value at present.
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Agree on the overvalued part. Although, I would think that most...
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Last
$142.10 |
Change
-2.170(1.50%) |
Mkt cap ! $21.69B |
Open | High | Low | Value | Volume |
$144.79 | $145.08 | $141.05 | $53.61M | 376.7K |
Buyers (Bids)
No. | Vol. | Price($) |
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1 | 5000 | $141.60 |
Sellers (Offers)
Price($) | Vol. | No. |
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$142.11 | 1199 | 1 |
View Market Depth
No. | Vol. | Price($) |
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1 | 5000 | 141.600 |
1 | 100 | 141.500 |
1 | 99 | 141.480 |
1 | 158 | 141.310 |
2 | 1199 | 141.290 |
Price($) | Vol. | No. |
---|---|---|
142.110 | 1199 | 1 |
142.260 | 1199 | 1 |
142.400 | 1199 | 1 |
142.800 | 55 | 1 |
142.890 | 48 | 1 |
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