P/e -- eps



Given the Earnings Per Share has dropped to 21.8p, that still puts the P/E on a heady 51 given the current price of 1124

OK this was due to a write down on ERP but is that an excuse enough - will there be another, then another?
The company implies it can revert to an EPS figure around 30 given time – putting the P/E back at 37.3 – on a 10% growth rate it still looks pretty high.



@Gamesinvestor1 my initial reaction was the same as your (I think), a big write down having a serious impact on the bottom line but, even if it is a true one off and adjusting the numbers back, it still comes out at a fairly heady P/E ratio that the implied growth didn’t really support. I too have also seen businesses where there seems to be ‘exceptional items’ pretty much every year which always leads me to the conclusion they are not exceptional at all, just a normal risk for the business which the management clearly don’t see.

That aside there were some positive comments from ‘analysts’ (yeah, I tend to be very sceptical since so few seem to be able to count properly let alone analyse anything) who were saying the numbers were down due to heavy investment for future growth - I have no problem with this if true and there really is lots of jam further down the road. But the big positive for me is the CEO did just wade in with £50k yesterday, not option exercise, incentive plan etc but new money, clean purchase.

Anyway I’ve just bought back the ones I sold when it went through my 1250 stop; not 100% convinced here but going to give it one more chance.