Electronic Game Card, Inc (fka EGMIQ)

[houtheman]

I'll tell you why I look at P/S ratio. If it's too high it represents too high of a profit margin. What do I mean by that? If the money is too easy or profit margins so high, it will attract competitors or cause customers to do it in-house. Meaning in the long-term the margins would be unsustainable.

The three things that could counter-balance that would be defendable patents, a monopoly, or a high barrier to entry.

To be honest I don't know their business enough to know if these three things apply so I simply reduce my risk and exposure if I see a very high P/S.

Feel free to rebut.