Elite Pharmaceuticals Inc (ELTP)

[kayak_wench]

Correct, timing isn't right. We do not have the earnings to push growth. Our earnings (i.e. profit) pretty much justifies our share price if one is looking for a PE ratio typical of a generic drug company. Sure a high tech start up can pull in a PE of 20 and higher. But the average generic drug companies PE ratio is reported as being 10 to 15 (depending on the year and which set of companies are included in the grouping) with many below 5. Elite doesn't have the debt problems of the big generic companies below 5 but they do have the problem of a product line that is too heavily dependent on a single product. If Adderall has problems so does Elite.

Elite's earnings per share this year assuming 2 million profit a quarter = 8/1000 = .008.
PE = .03/.008 = 3.75.

I do think Elite is undervalued right now. They probably deserve a PE closer to 5 which would push the price at 4 cents.

But I think we need to be earning more money per share to get much higher share price. If we could get to 10 cents that would be amazing and would mean we have an earnings of 100 million a year or 25 million a quarter. That is increasing earnings 5 times over what it is now. I think a 10 cent earnings per share could also push our PE more to the average of 10, making our price $1.

IF we get generic Oxy approved a 25 million profit each quarter maybe possible. That and assuming a PE of 10 would push us up to $1 share price.