Is n't is as simple as,
How much did I borrow?
How much do I have?
How much am I selling?
Am I making profit?
If you own a single stock of SNE, it would read,
debt - $8
Cash - $8
Sales - $64
Profit? Yes, $1
Now if you own GE, that would be,
debt - $120
Cash - $1
Sales - $13
Profit? Yes, $1.5
Both these stocks are trading around 24!
I know, their business is not camparable. But whatever they sell they are either no ONE or TWO.
Can anyone explain?
Why is there so much difference? You can easily see the pattern if you compare Toyota and GM too.
"In per share data the totals are divided by the outstanding shares thus making the data comparable other than the fact that the shares trade a different prices." Although not necessary and not frequently done, dividing per share data by cost of shares makes the data directly comparable..."
Fine...but you are the first person who has made clear that the per share data was being divided by the cost of the shares!!! Without that critical step, the per share data is not directly comparable, as I said. BTW, I was a math minor in college, so I am not among the numerically challenged. You might try getting more information first before you insult someone!
Your queries make for painful reading. Suggest that you take some basic math courses so you can acquire fundamentals of multiplication and division. While this may not necessarily improve your investing, it would substantially upgrade the quality of your Emails. In per share data the totals are divided by the outstanding shares thus making the data comparable other than the fact that the shares trade a different prices.
Total market cap\share = share price.
Total cash\divided by share = cash per share...etc.
Although not necessary and not frequently done, dividing per share data by cost of shares makes the data directly comparable (So that you don't have to think of the different share prices when comparing the numbers)
GE has ton to debt (Shown in Balance Sheet). I often asked myself how can GE reduce that Hundred Billion dollars of debt???
The only difference between GE/SNE is Supply/Demand for the shares in my opinion.
GE is bought by many US Funds while SNE is not.
But at $24 a share (for SNE), I believe I have a winner if I am willing to hold the shares 3 years or longer.
In fact, I bought SNE at $23.96 last week.
Well, as Peter Lynch would say, stocks ultimately follow earnings. Right now Sony is earning little compared to GE. IF Sony gets earnings back to a normalized and growing level, then Sony stock should recover nicely. But hey $157 a share was absurdly high (a bubble), and now valuations start to look quite reasonable. The simple chart formation is also indicating $23ish support MIGHT hold and $33 is a very reasonable upside price objective, so I too made a bet at $24. Sony brands and products and solid balance sheet make the odds of success high IMO. The only question is whether we go lower before we go higher. If we stay stuck near the low for a while its not a good sign. So far we saw Tokyo shares sharply reverse higher on the third day of trading after the earnings warning and consolidation on day four. Day five is Tuesday, as Tokyo is closed tomorrow.
Assuming your numbers are correct, I'd point out a couple of things. First, the price of the stock doesn't really matter -- it's the company's market value that counts. And the main reason that the market gives some large companies a premium valuation is consistency of earnings growth. So, as long as GE delivers consistent, 13-15% earnings growth quarter-in, quarter-out, it will always seem expensive compared to stocks like SNE because investors are willing to pay up for that kind of consistency. Also, when you look at debt, you have to consider the quality of the debt and the ability of the company to service it. As long as a company has positive (and growing) cash flow and AAA rated debt, investors aren't likely to be too concerned even if the debt is large. On the other hand, if a company with cash-flow problems suddenly has it's debt downgraded, its stock will likely be hit hard (this happend to several energy companies over the last two years).
"Assuming your numbers are correct, I'd point out a couple of things. First, the price of the stock doesn't really matter -- it's the company's market value that counts."
The numbers given are all per share numbers so comparing price of the shares is the correct way to go.
SNE is amazingly under priced!!!
Earnings growth comes after earnings,
Earnings come after sales,
sales comes after succesfull products.
When rest are equal, earnings weigh-in.
Otherwise its irrelevent, especially when it can fluctuate much due to product cycles. Setting up a plant or research unit will defenitly eat into the earnings but can spurt growth in subsequent quarters. Here are some figures on SNE/GE and GM/Toyota
So when you buy GE for 29 you are also buying 29 dollars of its debt for the share of 14 dollar of sales. In the case of SNE you pay 24, debt you owe 8, your share of sale 75!