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SORL Auto Parts, Inc. Message Board

  • jimgggg jimgggg Apr 21, 2010 1:57 PM Flag

    Doing some math

    The trailing 12 months PE is 14 while the forward PE is 10, which indicates an expected year-on-year earnings gain of 40% and a forward PE/Growth (PEG) of only .25 (normal PEG = 1). Obviously these PEs have not priced in such an earnings growth rate. Thus, the stock could go x4 and still be reasonably priced.

    My experience is that over time investors’ scans pick up stocks selling at low PE vs. their earnings growth rate. When this happens, the stock corrects upward very rapidly.

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