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AXT Inc. Message Board

  • go_cardinal_beat_cal go_cardinal_beat_cal Feb 23, 2010 4:26 PM Flag

    0.33 earnings * 15 P/E = $5 share

    0.33 earnings * 15 P/E = $5 share

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    • The collective was fairly accurate 10 months ago. Congrats on a nice far!

    • Agreed, I think those of us that have been accumulating much lower know that this intrinsic value is out there and have been patient.

      I would think if AXT continues to deliver/exceed expectations next 2-3 quarters then we could assume a PE moving closer to 20-30X range. Which should translate to a really nice stock price closer to $8-10.

      It seems most mkt technicians will not grant any mkt value for these intrisics to AXT at this time. Although I would think they all but guarentee us great earnings reports this year which may help the PE move in our favor.

      As an aside, quietly changed their rating from SELL to HOLD yesterday. Way to go JC.

    • The entire P/E question is of course debatable. Do you subrtact any intrinsic value of the stock before applying the P/E factor? Maybe you just remove short term assets like cash and such. With AXT there is of course the wildcard that you don't know what their join ventures are worth. They did give an update on how much money they have invested and made on several of their join ventures, so maybe one can use that as a guideline for coming up with a value of those imminently sellable assets. Then they got into China a while ago so have several realestate holdings, I believe in the Beijing area. That is worth a ton more than it was when they bought it.

      So lots of hidden value in this company. In the past few years it has correlated pretty well with 30 times forward earnings, especially during times of good earnings improvement. Right now we are on a pace to improve earnings by 30+% Q-Q, much less the 20% year over year you would need to justify a 30 P/E.

    • gggl,

      What's your share price estimation?

    • If you are going to use a 15 P/E you need to add their book value to the price target. That is only fair, especially since their book doesn't include the true value of their joint ventures.

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