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Valassis Communications Inc. Message Board

  • zoomlik zoomlik Aug 24, 2009 7:24 PM Flag

    i am new to this board .. should i invest

    or not

    earnings last quarter was about $16M after interest expense of about $20M

    market cap is about $700M

    so forward p/e is now about 700/(4*16) = 11

    As they reduce debt, interest expense will decrease and earnings will grow. debt payment can be from earnings or from settlement money

    if all debt is paid off, earnings for the past quarter would have been
    16+20 = 36M and forward p/e wold be
    700/(4*36) = 5

    What type of p/e such biz deserves to get ??? any thoughts ..

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    • the greatest thing about this board is that everytime a short comes in to talk the stock down, it goes up. So I love to hear why the stock should be sold because I just keep making more money. Thanks for comments.

      • 1 Reply to driskillmatt1
      • april_and_everything_after april_and_everything_after Aug 26, 2009 9:59 PM Flag

        no kidding. i bought at 1.50 and kept hearing how this stock was garbage. at 3, people kept saying "sell now this stock sucks", at 6, same thing, at 7 i heard "everyone's shorting...better get out"...then it busted up to 11, then again, "i'm shorting at 10, 11, 12, etc..then it bust up to 13, now 16. i mean, do whatcha want, short, go long, i don't care. real quickly though, they've had 2 solid quarters and Q3 will be good as well. plus, with the next trial in federal court, potential for 3Xs judgement...don't know why if they win, it gets tripled, but either way, this stock went up 60% with the first lawsuit at 300 million. what do you think will happen when they will a billion dollar lawsuit?

        good luck to all. i'll see you in 2010 when this stock is $30

    • i made a mistake in the 2nd part of calculation .. if all debt is paid off, net earnings will go up by 20M * (1- tax rate) and not 20M ... so earnings will go t0 about

      16 + 20*.60 = 28M and forward p/e is

      700 / (4 * 28) = 6

 

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