RE:RE:RE:RE:Reasonable ValuationIt depends. Book value can be a meaningless accounting number. Same with EPS. Sometimes I’ll buy based on a low price to liquidation value with a catalyst. But in general, I don’t like paying more than 7x-10x FCF in a profitable company with growth opportunity. Sometimes I’ll go higher for a really good company. But it’s hard to make money predicting the future, especially when you pay 25x.
if you bought a private company at 25x, you had better be sure it’s going to grow like a weed!