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Re: RCL Cruiser post# 43276

Friday, 05/30/2014 3:11:10 PM

Friday, May 30, 2014 3:11:10 PM

Post# of 50129
Hey.I just popped back in.The Email looks good to me and let me take a moment to explain valuation. For those who wonder why anyone would py .12 for FRTD or really why all buyouts seem to be at much higher valuations ,the answer is simple. Generally the true value of a revenue generating company is not their current EPS ( Earnings per share ) but rather a projection of those earnings plus growth over time.Companies on the Nasdaq and NYSE have what's called a PE ratio. (Price to earnings ratio) a PE of ten for instance means a company is valued at 10 times earnings. You generally do not see a PE assigned to OTC stocks since they generally are not as 'established' but the principle is the same.Therefore you value the purchase price of a company not just on it's current earnings but what it is likely to generate over the years.I hope this clears up some of the confusion being sowed here.

" Remember to be distrustful" Prosper Merimee {1803-1870}