PE Ratio & Next Week

PE ratio cannot be calculated when a company is loosing money.  So there are no PE ratios for the companies we are comparing.

To look for a PE ratio go to finance.yahoo.com and check out Shanda, TVB and Disney.  They all have very healthy PE ratios.

For comparing the companies you can still use the other measures as they will give you a sense of relative corporate health in an economy that is very difficult at the current time.  Here in Hong Kong and in the Mainland we are not feeling the real impact of the "Financial Tsunami" so it is not surprising that these entertainment companies are struggling.

This could actually be an opportunity.  The stock prices for these three will be low because of the economy and the fact that they lost money last year.  So if you compare them and decide that one has a better future and a better chance for recovery in the future than the others then you might actually be able to invest and take advantage of the current situation.  But you will need to look at these companies through the numbers and through their descriptions of their business(es).  What do you think about their chances on the basis of this information?  This is what you will briefly present from your seat on Monday.

As you look you need to keep in mind that before the iPod Apple Computer was in exactly this position and we all should have bought stock at that moment in time.  If you believe in a company's  products, services or approach to business then you find it easier to invest.  If you are investing when their stock price is low then you are reducing the risk associated with the investment.  It may or may not be the right investment in the long run, but it will be one that you are comfortable with because you have done the research and you understand the way the company does business.

- Dr. W -