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Cee-It

05/20/08 3:36 PM

#23301 RE: sburlria #23300

The fact is the relationship of a stock's value to its current sales revenue is never a good barometer to try to project anything. So, why try?

What investors do is look at growth of sales and growth of margin; and therefore, the likelihood of profits increasing rapidly or slowly in the future (and the certainty of profits, the risk).

Sure, you can build an equation to compare that to current sales volume and come up with an industry average -- but it is totally useless and meaningless garbage for investing if you forget about sales growth.

Hence,a company going from $1 million to $10 million in a short time will most likely have a much, much higher ratio of share price (or Market Cap) to sales revenue than one that is going from $1 billion to $1.1 billion.

So, your attempt to compare is very meaningless without any consideration of the true motivating factors for share price (which are always much more inclusive of future earnings and projected current/future book value). The market looks ahead, not back.

GLTA