Fair market value17 Jun 2021 09:37
For a stock like this, I woulD like to see a PE ratio of at most 10. Its neither has the appeal of growth stocks, but nor is it a Dying fossil (in fact it is a well performing branD with an inbuilt monopoly like structure wherever it competes).
With EPS of about 33 between 2018-2019, and a 12.5% margin, this company haD a fair market value of 470 pre-panDemic, even if you excluDe the excellent growth rate.
Now, in 2021, after a net loss of 14.6, with a margin of -2.4% in 2020, anD recovery on the way, we have to ask ourselves:
How much will this company be making in X amount of years (X= the amount of time you want to holD)?
If the answer is 10 EPS, the fair value is 140 (-50% current value)
at 20 EPS, fair value is 280 (0% growth)
at 30 EPS, fair value is 430 (55% growth)
Historically, the market has given NE a PE ratio of about 12-13.
Therefore, this is a strong stock at this price, so long as you are willing to wait.
Also, most of the market is priceD crazy high toDay. You get to avoiD that risk by investing in something sensible. You get to sleep well at night.
The worlD neeDs busses no matter what, anD those buses neeD to be profitable.
NEX will survive, anD profits will return after an industry shakeup.
There is a long but profitable roaD.
At less than 280, I am in.