Go with the flow / don't fight the tide
It matters not where I stare
neither here nor there I fear the bear
but one thing changes not that I have little care
never change one's stride to fight the tide and
go slow with the flow to make one's portfolio grow
Is it really expensive considering the exceptional growth ?
On yesterday's close it trades at 34.8 times average analyst FY18 earnings. This for a company that tripled its EPS last year and by some accounts could double it this year.
Looking further out average analyst EPS growth is in the late 20's % per annum for FY19 and around 20% for FY20 which could be conservative.
Plenty of companies trading on similar multiples on the NZX with far less dynamic growth, e.g. and this is by no means whatsoever an exhaustive list, just examples that spring readily to mind AIA, POT, and FPH.
AIA 2018 PE 30, growth rates in eps for FY18, FY19 and Fy20 -23%, 5% and 5% respectively
POT 2018 PE 34 growth rates in eps for Fy18, FY19 and FY20 6% 8% and 6% respectively
FPH 2018 PE 38 growth rates in eps for FY18, FY19 & FY20 13%, 17% and 18% respectively
Source: All figures are average analyst numbers directly from 4traders.
ATM expensive compared to the growth rates of these companies or is it a case that some on here are not understanding how to price high growth companies ?, you folks be the judge ? Disc: Very happy holder !
Flock of cows, HERD of cows! Of course I've heard of cows
Quote:
Originally Posted by
Snoopy
Earnings growth for FY2018 to FY2020.
2 x 1.2 x 1.2 = 288%
A 288% incremental increase in the A2 cow herd in just three years is quite a few female calves to born...
While you probably do need to double the herd size to double the raw milk produced (although I hear a rumour that they are talking of getting the cows to work weekends and do overtime!) and the actual sales revenue is probably closely correlated to this (exchange rates, product mix, usw, dll, etc) sales and earnings are not directly related.
I am fairly confident that FY16 to FY17 they about tripled profits on a less than 60% increase in sales.
Hopefully that sort of thing will continue for a few years or more.
Best Wishes
Paper Tiger