RE: Oversold20 Jun 2021 16:20
Perhaps Mick will come back on that, his own detailed research, etc. Or maybe refer to some selected website. No matter. Plenty of time. Anyway, my thoughts.
The P/E ratio, in the context of Sig, without earnings to put into the equation, is irrational in my view. That is why many web references to it across loss making companies refer to it as not applicable, or something similar. The extent to which a company is loss making, turns up in its results. Everyone with any sense knows Sig is loss making. That was known at recapitalisation, and ever since. People have been investing or not ever since, 'bad' PE or not.
There are likely to be at least two sets of people posting on here. Those who say they are invested and optimistic, and those who say they are not. Some will go so far as to give advice, qualified to do so on their better understanding of world economic and company events. In the future, if all goes well, Sig will create earnings, and a PE ratio will come better into it's own. It is likely to be high. One side will say it is too high and the company is overvalued, the other side will say no, investors are pricing in future earnings growth.
In Mick's case, he says investors will not invest due to a high PE ratio which he got from somewhere, I suppose. He second guesses them. Historically badly, as his guess has not been the actual experience. It will, as before, be the level at which individuals see prospective value which will dictate that.
If I have him right, he sees Sig as a potential multi-bagger but not at this time. Contemporaneously he questions the company's survival, and says the company is at risk of 'bankruptcy' ( bad choice of words, that's for individuals, companies go into liquidation) I suggest that may have been the case historically, though there were other options apart from the recapitalisation, but there is really no need to be floating that again now, not if you see truth in the last update - "We do however continue to expect the second half to be both profitable and cash generative, and in light of the stronger than anticipated recent performance we now expect full year revenues to be slightly ahead of prior expectations, and profits also to be higher than previously expected."
Invested posters may also choose to find some confirmation bias from forward thinking in the creation of distributable reserves. The uninvested posters will look elsewhere to make their case, for whatever reason they feel the need to make one.
Sign In
Follow the stocks
