Monday, May 11, 2015

Is Sarine Tech's P/E 28 or 145?


Sarine Tech released their recent quarter results. Check it out.

I don't know about you, but it looks horrigible to me. Comparing this quarter to last year's quarter, net profit got ravaged 90%. That's a shit lot of percents.

Diluted EPS:
2014 Q2: 3.04
2014 Q3: 2.05
2014 Q3: 1.45
2015 Q1: 0.34
TTM EPS: 6.88

TTM PE = 197 / (3.04 + 2.05 + 1.45 + 0.34) = 28.6
Q1 EPS extrapolated PE = 197 / (0.34*4) = 145

Of course the benefit of using TTM is that it smooths out dramatic swings in earnings, like this recent quarter.

However, the downfall is that (as innate with all other sorts of indicators that average out historical values) too much emphasis might be placed on the past, and the situation then and now might have passed a pivotal turning point and have dramatically changed.

Don't get me wrong though, they are an awesome business. I especially love that they have almost no debt and they are very cash rich. They had thick fat margins too. As a business, I love it.

However, like I said before, valuations is outrageous. Sorry guys, I'm really not cut out for growth investing.

2 comments:

  1. worms are starting to crawl out, will avoid this stock for sure

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    Replies
    1. Aye, scary. It will be interesting to see where it goes from here! Stock price went up today though :O This is one stock I really don't understand!

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