This stock is a screaming buy!! Low p/e, insatiable world demand for oil which has been muted by recent recession. Once recession ends, oil will be way over $100/barrel. Usa printing money will drive dollar down and oil price up. Usually a low p/e stock indicates that there is fear earnings could collapse.ii think the opposite is true here. Despite low p/e, tremendous upside for earnings. Dividend could actually go up from already attractive levels. Screaming buy
A low P/E ratio does not an undervalued stock make. The "E" in the P/E is based on accrual accounting, which is great for the company, but not so great for the investor. Reported earnings does not follow the cash.
Just because a company reports earnings of $500 million in a particular quarter, for example, doesn't mean the company generated $500 million in CASH. The company could have generated $100 million in cash relative to its net income, thus overstating its true profitability or it could have generated $800 million in cash relative to its net income, thus, understating its true profitability.
In other words, the $500 million in reported earnings isn't sitting in some bank account somewhere. Net income is PURELY for figuring out what the company owes on its federal tax return.
P/E is a meaningful metric, as is EBITDA and cash flow. Different people have their preference of what is more important to follow. The old adage, cash is king, comes to mind. Internally we look at EBITDA more (not looking as an investor). So, in a sense, both of you are right, if looking at it from a nice perspective. Or both of you are partially wrong if you just want to disagree.
you sir are a fking idiot. The E in p/e does stand for earnings, wheather those earnings are in cash, acc't rec. they are a product of operations and sometimes extrordinary events like gain on sales and they are after taxes andother expenses. If you are referring to cash flow then say so otherwise shut the fk up.. your lack of understanding basic accounting should preclude you from ever investing.