Thanks! I was and still am doing a lot of hopping around due to only having a certain amount of time. This is why I referred to that .186 as "the immediate bottom line of the Equity/BV of DMGS" in that post (and as a worse case minimum scenario).
Still, you revealed more than I would have been able to make as clear as you did. Thanks for sharing as it should help to show DMGS is still that much more undervalued even at these levels. Thanks again!
I forgot to respond to your thought of DMGS having a Price to Earnings (PE) Ratio. I do understand why you would say such as it is a fair assessment. Yes, a stock is supposed to "officially" have Earnings first to have a PE Ratio, but until known, a conservative PE Ratio of 12 is usually assessed until revealed.
The PE Ratio is the growth “expectancy” rate for which the stocks within that particular Industry and Sector trade and is expected to stabilize to trade at. Instead of using a conservative PE Ratio, one could also consider using the PE Ratio for that supposed Industry or Sector in which it would trade.
DMGS appear to be trading into a considered forward looking P/E Ratio, but there are a few “fundamental” thoughts of consideration that one never actually knows until after the fact from the release of SEC filings/Financials. They should be here any day. That’s usually the best way to know for sure what perspective should be actually considered.
Usually, the market determines how you should consider the P/E Ratio to apply. Many use the P/E Ratio with stocks that have the potential to posses a positive Earnings Per Share (EPS). The P/E Ratio is often considered the minimum price investors are fundamentally willing to pay for a stock when multiplied by the EPS. The P/E Ratio is used to examine the relationship between a company's price per share and EPS determined by:
Share Price/EPS = P/E Ratio
The P/E Ratio is a multiple to use for determining stock prices to convey the P/E Ratio as a general growth expectancy rate. The P/E Ratio is usually determined from an average of the top 20 to 30 companies in that particular Exchange, Sector, or Industry.
It is assumed that each company within that Exchange/Sector/Industry will grow with the same expectancy rate under certain Fundamental Principles in relation with a company's Revenue, Expenses, and Outstanding Share structure or its EPS to better put it. Again, the P/E gives you an idea of what the investor within the market is willing to pay for a company’s earnings. Consider below as P/E Ratio options of consideration:
High P/E Ratio is Bad Under this thought, investors see a stock with a high P/E Ratio as a stock that is overpriced. Investors believe that the stock is trading way to high given its fundamentals. Investors believe that the stock has grown way too fast and that the market will realize such and the price would drop to justify this thought.
High P/E Ratio is Good Under this thought, investors within the market believe that high hopes exist for the stock’s future. It’s believed that the higher a P/E Ratio, the more growth potential it has within the market because it's showing growth higher than the average conservative market P/E Ratio. It is assumed that the company would continue its normal expectant growth rate. Investors are willing to pay more for a company’s earnings than what could be considered a conservative price to others because of where they believe the stock will be fundamentally going.
Low P/E Ratio is Bad Under this thought, a low P/E Ratio would reflect that the investor has no confidence in the future of the company’s earnings and stock. They believe that there is no market interest due to lacking fundamentals.
Low P/E Ratio is Good Under this thought, investors believe that the stock is a sleeper that has been overlooked by the investors within the market. These are stocks that the investor believe they are finding before anyone one else does before they trade into a high P/E Ratio. Those supporting a low P/E Ratio believe that the lower a P/E Ratio, the more undervalued that stock is within the market as compared to normal growth expectancy rates from companies trading within their market.
As far as which of the thoughts above are correct… I don’t know? Even the Market Professionals have not figured it out yet. There is no correct way in my opinion because there are too many variables that could change the way investors react and think to justify why they are buying a particular stock. I think people would be fair to themselves to be flexible in their considerations since you won’t know what actually the right way was until after the fact. It all comes down to what you as an investor is willing to pay in a stock and their earnings.
It would be very ignorant of me to “finitely” state that your thoughts are right or wrong as DMGS could be up on some days or down on some others. It will ultimately depend upon the substance that DMGS continues to deliver to the market and how the market absorbs or interprets DMGS. Please continue to share your thoughts as this post was primarily to help some others to understand the P/E Ratio logic to include myself.
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