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Nintendo Co. Ltd. Message Board

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  • claudiman31 claudiman31 Dec 21, 2007 2:40 PM Flag

    Big $$$ looking to buy

    <<<If your so smart why didn't you give an answer rather than a high and mighty comment? The P/E is not really as important as many make it out to be anyway. Most companies with growth rates like have a P/E higher than 100.

    It's spelled "you're" and I actually posted a topic titled "Investor Relations" so people can actually follow a link and do the homework. You say the P/E isn't that important because of the growth rate. Um, how do you know the growth rate if you don't even know the P/E? I am holding on to my NTDOY shares. I just think you would be better off doing a little bit of DD before hyping up the stock.

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    • Well one metric that combines the two is the PEG.

      Companies are measured on growth, and P/E measures how much they currently cost. PEG is basically P/E divided by growth rate. For example, if you take the current P/E, and divide it by next year's estimated growth you'll get a ratio.

      Anything over 2 is generally over valued, anything under 1 is usually a screaming steal. So a P/E of 30, with estimated growth of 15% is a PEG of 2.0. Anyhow that's just what Cramer says.

      The numbers to keep in mind aren't the past numbers, its the ones coming up since Wall Street loves growth.

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