F and GM dealt major down grades. How will that impact CLF? US Steel to utilize more mini mills requiring fewer non-union workers. Will CLF hit $EPS of $6.00?
Why do we use P/S in valuation at this point? And not P/E? Well P/S multiplier is a good metric to use since we do not have positive earnings per share( EPS ) yet! See CLVS of why sp tanked!
P/S metric multiplier is a good predictor of how fast revenues are growing in order to achieve profitably. The higher the revenues growth rate, the higher the valuation we can arbitrarily assign with using the P/S ratio. Once we achieve profitability, then the PE ratio would be a better predictor of our stock price in terms of determining how many multiples investors are willing to pay for every full-year $EPS reported. PE varies accordingly depending on the sector. Biotech has the highest. In the late 90s, it was the tech sector, the dot.com era.
Once we achieve profitability, we can worry about the PE ratio and take it one step further using the PEG ratio!
Good luck to us all. There's light at the end of the tunnel. Next 4Q, we need to hit at least $46M to be on track to hit $260M for full-year 2020 revenues.
The 2020 annual report was published yesterday. I haven't review it, but did look at EPS. Their new policy is to pay 50% of sustainable net income as a dividend or stock buyback. Their 2020 $EPS is $.77, and that would be about a $.38/share dividend. But it's interesting to also look at their 2019 EPS. It was $1.35, so the 50% dividend would be about $.68. Not such a high yield if you bought in the last week or two, but pretty great if you bought when the price was $6 to $8 back in 2020, and super if you happened to buy at their 2020 low, which was $4.70/share.
P/S metric multiplier is a good predictor of how fast revenues are growing in order to achieve profitably. The higher the revenues growth rate, the higher the valuation we can arbitrarily assign with using the P/S ratio. Once we achieve profitability, then the PE ratio would be a better predictor of our stock price in terms of determining how many multiples investors are willing to pay for every full-year $EPS reported. PE varies accordingly depending on the sector. Biotech has the highest. In the late 90s, it was the tech sector, the dot.com era.
Once we achieve profitability, we can worry about the PE ratio and take it one step further using the PEG ratio!
Good luck to us all. There's light at the end of the tunnel. Next 4Q, we need to hit at least $46M to be on track to hit $260M for full-year 2020 revenues.
Now, is the strong BUY on ptla!
OUCH