REX American Resources Corporation (NYSE:REX) shares have had a really impressive month, gaining 36% after a shaky period beforehand. The last 30 days bring the annual gain to a very sharp 99%.
Even after such a large jump in price, it's still not a stretch to say that REX American Resources' price-to-earnings (or "P/E") ratio of 16.9x right now seems quite "middle-of-the-road" compared to the market in the United States, where the median P/E ratio is around 17x. Although, it's not wise to simply ignore the P/E without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
With its earnings growth in positive territory compared to the declining earnings of most other companies, REX American Resources has been doing quite well of late. It might be that many expect the strong earnings performance to deteriorate like the rest, which has kept the P/E from rising. If not, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.
Want the full picture on analyst estimates for the company? Then our free report on REX American Resources will help you uncover what's on the horizon.
Does Growth Match The P/E?
There's an inherent assumption that a company should be matching the market for P/E ratios like REX American Resources' to be considered reasonable.
Taking a look back first, we see that the company grew earnings per share by an impressive 122% last year. The strong recent performance means it was also able to grow EPS by 3,326% in total over the last three years. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth.
Shifting to the future, estimates from the sole analyst covering the company suggest earnings growth is heading into negative territory, declining 32% over the next year. With the market predicted to deliver 11% growth , that's a disappointing outcome.
In light of this, it's somewhat alarming that REX American Resources' P/E sits in line with the majority of other companies. Apparently many investors in the company reject the analyst cohort's pessimism and aren't willing to let go of their stock right now. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the negative growth outlook.
What We Can Learn From REX American Resources' P/E?
REX American Resources' stock has a lot of momentum behind it lately, which has brought its P/E level with the market. Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
We've established that REX American Resources currently trades on a higher than expected P/E for a company whose earnings are forecast to decline. Right now we are uncomfortable with the P/E as the predicted future earnings are unlikely to support a more positive sentiment for long. This places shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
Don't forget that there may be other risks. For instance, we've identified 1 warning sign for REX American Resources that you should be aware of.
You might be able to find a better investment than REX American Resources. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
REX アメリカン・リソース・コーポレーション(NYSE: REX)の株式は、それ以前の不安定な時期を経て36%上昇し、非常に印象的な月となりました。過去30日間で、年間利益は99%と非常に急激に上昇しました。
このように価格が大幅に上昇した後でも、REX American Resourcesの株価収益率(または「株価収益率」)の16.9倍は、株価収益率の中央値が約17倍である米国の市場と比較すると、今のところ「中途半端」のように思えると言っても過言ではありません。しかし、投資家は明確な機会やコストのかかる間違いを無視している可能性があるため、説明なしに株価収益率を無視するのは賢明ではありません。
他のほとんどの企業の収益の減少と比較して収益の伸びがプラスの領域にあるため、REX American Resourcesは最近かなり好調です。多くの人が、好調な収益実績が他の企業と同様に悪化し、それが株価収益率の上昇を妨げていると予想しているのかもしれません。そうでなければ、既存の株主が株価の将来の方向性について楽観的になる理由があります。
会社のアナリストの見積もりの全体像を知りたいですか?それなら、REX American Resourcesに関する無料レポートは、これから何が起こるかを明らかにするのに役立ちます。
成長は株価収益率と一致しますか?
REX American Resourcesのような株価収益率が妥当であると見なされるためには、企業が市場と一致している必要があるという本質的な前提があります。
これを踏まえると、REX American Resourcesの株価収益率が他の大多数の企業と一致していることは、いくぶん憂慮すべきことです。どうやら同社の投資家の多くは、アナリストたちの悲観論を拒否し、今は株を手放す気がないようです。株価収益率がマイナスの成長見通しに沿った水準まで低下した場合、これらの株主は将来の失望に陥る可能性は十分にあります。
REX アメリカン・リソースの株価収益率から何を学べますか?
REX American Resourcesの株価は最近勢いを増しており、それが市場の株価収益率を上昇させています。株価収益率だけで株式を売るべきかどうかを判断するのは賢明ではありませんが、会社の将来の見通しを示す実用的な指針にはなり得ます。
REX American Resourcesは現在、収益が減少すると予測される企業にとって、予想よりも高い株価収益率で取引されていることがわかりました。予測される将来の収益が長期的にポジティブなセンチメントを支える可能性は低いため、現時点では株価収益率には不安を感じています。これは株主の投資を危険にさらし、潜在的な投資家は不必要な割増金を支払う危険にさらします。
他にもリスクがあるかもしれないことを忘れないでください。たとえば、REX American Resourcesで注意すべき警告サインが1つ見つかりました。
REX アメリカン・リソースよりも良い投資を見つけられるかもしれません。候補者を選びたい場合は、低い株価収益率で取引されている(ただし、収益を増やすことができることが証明されている)興味深い企業のこの無料リストをチェックしてください。