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S&P 500
5,633.91
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1.02%
)
US TECH 100
20,107.60
(
0.99%
)
Dow Jones
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(
1.09%
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emulwa

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emulwa

Re: wrongjoe post# 318

Tuesday, 10/31/2006 4:40:29 PM

Tuesday, October 31, 2006 4:40:29 PM

Post# of 951
Assume that the Revenues do not increase from 2005. 2005 were $58,592,331. A conservative profit magin of 20% will give you about $11.6mil.
EPS = net income/share outstanding.
11,600,000/20,000,000 = 0.58 (EPS).
Industry PE of 50 = PPS/0.58
PPS = 0.58 * 50 = $29
PPS of $29 is assuming that the company does not improve. If the revenues and profitability continue to improve, then the company will have more capital invested in it. Remember, the interest rates will determing the trend of this stock from now onwards since it is in the mortgage business and suddenly the stock has become a longterm due to the market factors that surround it. Do you know how citi group and Wells fargo made their mark? "they were in the lending business".

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