Forum Archive Index - November 2001

["Peter" <pmaiden@xtra.co.nz>]

Nick posted this - Took a sizable hit in the tech bust but seem to be on the way back up creating a bit of interest with PER of 4.3 and the sector average is 29.3

 

Derek asked what PER was?

 

Derek - PER is Price Earnings Ratio - same as your PE.

 

This is one case where what you read is not all what it seems. The PE of 4.3 in Nicks post was presumably based on the reported earnings of 14.6 cents a share in 2000.

 

Since then there has been a capital restructure. The latest results for the June year are a better assessment of the real position.

 

Reported earnings per share in 2001 were 3.5 cents (on the higher number of shares). However this has been calculated on the average number of shares on issue during the year - if calculated on the year end figure it is about 2.8 cents per share.

 

That is while some sites show the current PE (at 140) of MIA at 50

 

By the way, Derek,  I think you have misread the Yahoo site -  MIA PE is 27.8 (on forward earnings forecasts) against sector average of 42.88.

 

Did you also notice that PEG number - 0.65. On that basis MIA has to be a must for value investors with a PE ratio being a miserly 2/3rds of it's forecast earnings growth rate.

 

On paper a buy for the value investor and for any sector followers obviously one of the cheaper shares in the sector.

 

Certainly an interesting stock but huge expectations built in at the current price of 140. However if you believe that these expectations will come to fruition go for it.

 

Cheers

 

Peter