Too early to buy AMC stock
$AMC Entertainment(AMC.US$
But it is too early to buy AMC stock. While its valuation -- as measured by the price-to-sales ratio -- has come way down from the unsustainable, meme-stock levels of last year, it's still way above longer-term levels. And that's even though revenue has cratered, expenses have risen, and debt is higher.
But it is too early to buy AMC stock. While its valuation -- as measured by the price-to-sales ratio -- has come way down from the unsustainable, meme-stock levels of last year, it's still way above longer-term levels. And that's even though revenue has cratered, expenses have risen, and debt is higher.
For now, folks can be content with rooting for the company to stay on course with its recovery without acquiring its expensive shares.
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colt 45 : how to understand p/e ratios ? please give me a example to learn by please I am new to all this!
Jodom_JayOP colt 45:
Jodom_JayOP colt 45: Earnings per share is generally calculated by dividing the net profit of the company for the past year by the total net value of shares sold in the issue. The lower the P/E ratio, the lower the price at which the investor can purchase the stock. Assuming the market price of a stock is $24 and the surplus per share for the past year is $3, the P/E ratio is 24/3 = 8. The stock is considered to have a P/E ratio of 8 times, i.e., assuming that the enterprise's net profit for each subsequent year is the same as last year's, the payback period is 8 years, excluding inflation, which translates into an average annual return of 12.5%, and investors can share $1 of the enterprise's profit for every $8 paid. However, listed companies usually only use part of their earnings to pay dividends, and the rest is used for further development, so the inverse of the P/E ratio is not directly equivalent to the dividend rate.
Investors calculate the P/E ratio mainly to compare the value of different stocks. Theoretically, the lower the P/E ratio of a stock, the lower the investment risk of the stock and the more worthwhile the investment. Comparing the P/E ratios of different industries, countries and time periods is not very reliable, and it is more practical to compare the P/E ratios of similar stocks.