RE:RE:Mr. Market is wrong Hi Sky,
Right. It is easy for me to see BBD at $130. This is how I am looking at it.
You know P/E ratio is price of the stock divided by earnings per share over the last 12 months. I pulled the P/E off yahoo finance. You also see stock price and EPS. Basic stuff.
Price of stock divided by EPS is 6. So, Mr. Market is giving a multiple of 6 times earnings to buy one BBD stock. I have never seen the multiple so low for BBD. This year 2023 Q1 P/E multiple was 21. Q2 was 14. And now only 6.
Why is Mr. Market being so low? Because he is afraid of recession, or has to take money out of market to pay higher mortgage, or pay higher margin rates. And he is afraid that BBD is not safe. Maybe he lost money on Old Bombardier. But he is wrong. BBD is now the NEW BOMBARDIER. It’s the lag effect.
BBD earnings is $7.8 (from yahoo). Let’s say we use same P/E multiple that Mr. Market gives Textron which is 16.88. $7.8 multiplied by 16.88 is $131.66.
It may take a couple of years for Mr. Market to catch up. But it might happen sooner than we think.
All the best to all,
Snowey