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Beam, Inc. Message Board

  • antiquebern antiquebern Jul 9, 2012 11:23 AM Flag

    testing 50 ema/ should rally

    hopefully..the price action has been a bit troubling lately.

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    • Personally, I think the BEAM price is way too high. I have sold some 57.7 calls for September which I hope to buy back for a small gain. So far I see EPS of $2.30 or $2.40 for the year with growth of perhaps 10% annually. That does not justify a PE of nearly 30 IMO.

      Unfortunately, I don't remember what it is that makes Yahoo report earnings over $5. Clearly if that were accurate and sustainable, our price would be in line with my thoughts about valuation. But as far as I know $2.50 is more like it which makes $50 fairly high.

      Or am I making a mistake here?

      Best, L.

      • 1 Reply to skiplarson98
      • I checked a little further and Yahoo's income sheets show that about $3 of EPS is categorized as discontinued operational margin in the quarter ended Sept 29, 2011 and another $2 worth is also discontinued operations from the previous quarter. Thus the reported EPS for BEAM ought to reduce when earnings come out on 8-2-12 and by almost $2.00 for the last year. Then in November's report another couple of bucks will be dropped bringing annual earnings to a more representative $2 to $2.50 per share.

        My first set of calls expires in Sept. so I now will regard myself as extremely lucky if those shares get called away at $57.50 since I would expect to be able to buy back the same shares for less than $50 in the near future.

        Again, I could be missing something though.

        Best, L.


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