Obviously the market prices in future earnings. It does that for every share.
What I'm saying is that at these levels you are paying way to much for those forecasted earnings.
In other words FBR's high PE cannot be justified by it's expected future earnings. My opinion.
Good business.
Way to expensive.
Apple - 16
Google - 20
Those are high PE's that can be justified...
Sasol for example is on a PE of 9... Comair on 7...
Now here's value I believe.
SAB is on 28... Anchor on 36... NPN is on 82 atm!
High expectations here. Very.
Yes PE is on EXPECTED future earnings. BUT, at what point does it become ridiculous?
I prefer looking at PEG.
Never only buy quality. Buy value.
Why are you kicking FBR here?
Technically speaking it was much more expensive a year ago. I agree it is still expensive - but so is the rest of the market.
Last I checked average PE was close to 20...
Sure, I won't be buying more at this level, but while they are still churning out consistently good results, it remains a clear hold in my view.
Anyway, I plan to take a little profit at >110 only to bring it back down to less than 5% of my portfolio.
And hopefully I will use that profit to buy some of the "value" that you speak of.
Edited by Hooligan, 28 October 2014 - 10:08 AM.