RE:RE:HEXO with a PS-Ratio of 20Queen - you're just not understanding.
The PS Ratio is simply a hard cold math calculation - it's not an opinion and has short comings such as not taking debt, or future potential into consideration. I'm not making those PS Ratios up - they're all from my Waterhouse account research tab
quinlash - (5/26/2021 12:04:54 AM)
RE:HEXO with a PS-Ratio of 20 Dog,
Your earlier position on PS-Ratio was that anything over 4 was too high however the list of Cannabis companies you present have 7 out of 11 companies trading well over a ratio of 4 with at least 2 of the companies trading under a PS-Ratio of 4 being the two that were close to bankrupcy.
Exactly - what Ive said is anything over a 4 and it starts to be over valued - over 10 is a red flag. (doesn't mean they closing - just that their share price is too high). I've also said that most agree that almost all cannabis stocks ares till over valued - which is what the list shows.
As for the 2 near bankrupt companies - I've also said that one of the big problems with the PS Ratio is that it doesn't include debt in the equation. At .10-12 cents, yes Zena is under valued - common sense tells you that a 'more fair' price might be .15 cents - but the PS Ratio doesn't tell you what the fair price is, just that Zena is under valued
The EV/Sales ratio does take debt into account - and so it's a more accurate extension of the PS Ratio, which is what I'v'e said. Read up on EV and EV over sales.
PS-Ratio is sector specific, if you look at the bigger / more popular names you can pick out whichever one you like as a comparible stock to model against. Canopy, being very popular and having a very similar business model as HEXO, is the one I consider the best comparison to HEXO, pick another one if you like.
You can pick any stock you like to compare - but if you want a fair comparison, you pick a roughly equal company. If Hexo and Comapny both ahve sales of around $50 million, both have a common shares issued of around 75 million - but Hexo's share price is $7 and Company B is $14, then you can drill down to find out which is more accurate.
Comapring 2 companies with totally different numbers is pointless. If shares are part of the equation, why use two companies that have 100 million and the otehr 300 million to compare?
Go back and see when the last time Canopy Growth traded under a PS-Ratio of 10, then seriously ask yourself if you think Canopy was overvalued in 2020 when the entire Cannabis sector pulled back hard on the C-19 downtrend. Also consider that it traded over PS-Ratio of 50 in 2021,
? I don't really care if and when Canopy traded under 10. Having a PS Ratio of 50 simply meant they were even more over valued than now - their share price and PS Ratio has simply dropped down closer to reality now at 20.
SunDial is looking down the throat of a major RS to address their listing requirements and it has a PS-Ratio of 29.8... ?? Come on, give me a break
Exactly - Sundial is currently grossly over valued and the PS Ratio of 29.8 shows it. Sundial proves what the PS Ratio is actually for - to measure whetehr or not the current sp is over valued or under valued - Sunndial is over valued.
I think you have it in your head that the higher the PS Ratio, the better - and it's the opposite.
It's obvious, the short-sellers onn HEXO are sitting on a compressed spring pending launch.
Again - the PS Ratio is a cold mathematical calculaion - has nothing to do with opinion or 'shorters'. Anyone can run the numbers.
Also again - research the EV and EV/Sales ratio.
FYI - Sundial has an EV/Sales ratio of 23.2, Hexo's is 10.1 and Canopy's 26.1
The lower the ratio, the better - but again 1-4 is indicative of a more solid company.
I use Delta 9 - not to pump them - but simply beccause they ARE a goode xample of a solid little company, their EV/Sales is 1.6