RE:PYR is a value as well as a growth stockkingscorpion wrote: If this $1.5 billion deal goes thru you are looking at $600 million net earnings and $600 million net earnngs/ total shares outstanding = $4.00 per share and that's only PE multiple of 1 . If you give the company PE =10 THEN THE SHARE PRICE WILL GO TO $40
I agree with your numbers if the earnings took place in one year. What if the contract is paid over a number of years? Here is what the sp would look like depending on the earnings multiple and the number of years the contract were to span:
| Shares O/S | 140,000,000 | | | | |
| Earnings | $600,000,000 | | Share Price |
| Span in Years | Earnings/Year | EPS | 10 P/E | 15 P/E | 20 P/E |
| 1 | $600,000,000.00 | $4.29 | $42.86 | $64.29 | $85.71 |
| 2 | $300,000,000.00 | $2.14 | $21.43 | $32.14 | $42.86 |
| 5 | $120,000,000.00 | $0.86 | $8.57 | $12.86 | $17.14 |
| 10 | $60,000,000.00 | $0.43 | $4.29 | $6.43 | $8.57 |
| 15 | $40,000,000.00 | $0.29 | $2.86 | $4.29 | $5.71 |
| 20 | $30,000,000.00 | $0.21 | $2.14 | $3.21 | $4.29 |
If one were to be cautious one would prepare for the 20 year deal, so the portion of share price from torches would range from $2.14 to $4.29.
Being more optimistic for a 10 year deal would give a share price ranging from $4.29 to $8.57 and with a five year deal, ranging from $8.57 to $17.14.
Be prepared for the numbers from the 15 or 20 year deal and if they are better than that, great!