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Synergy Resources Corporation Message Board

  • jtyler2030 jtyler2030 Mar 12, 2013 4:24 AM Flag

    I would sell this hand over fist

    Everything is looking great, revenues are growing, profits have finally come about but there is a huge red flag. The Price-to-Sales ratio.

    Market Cap of $388 million / Sales of $28 million put the price to sales ratio at 13.85.

    In other words, let me give you a comparison. An established company in Conoco Phillips has a PSR of 1.18.

    Let me put this another way. You are paying for a valuation 13 times the volume of business this company does. Let's all roll on back to the Dot.BOMB era and buy at 100x PE multiples. If your buying here, you are nuts. Nominal returns will only be achieved through huge rates of growth.

    Sentiment: Sell

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