RE: Fair P/E ratio?6 Jun 2020 23:14
Interesting opinion, I agree on some points.
Firstly let’s all agree that this is a business who was operating before covid and its future needs to be based on its pre covid life plus a slight increase due to covid. Future value is the key here.
In earlier RNS we were told this would be transformational for the company. Now stop reading that as a shareholder and read it as a director or member of staff.
That statement means, we will transform the company, upgrade all equipment, fund future projects, employ more staff, pay debt etc etc etc
When a company happens upon a pile of gold, it doesn’t just give it to the shareholders, it’s main aim is to grow!
So expect huge upgrades, new projects and long term value but this will all be swallowed up. They were 10p a share before covid, So to expect them above 100 After the spending starts is folly.
In a few years this maybe a goldmine but don’t expect any of this cash generation to go into your pockets!
I’m surprised I’m having to spell out how companies grow.