tag:blogger.com,1999:blog-2949218657849719987.post4948148658027228220..comments2024-02-10T10:35:20.557+00:00Comments on My contrarian adventure: Analysis of bpostFredrik von Oberhausenhttp://www.blogger.com/profile/10924238593055161520noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2949218657849719987.post-3148917728622508852014-08-03T20:36:37.125+01:002014-08-03T20:36:37.125+01:00Hi Carl,
The motivated P/E comes from Benjamin Gr...Hi Carl,<br /><br />The motivated P/E comes from Benjamin Grahams formula that 8.5+G*2 where G is the growth in %-age. So a company with 0 growth has a motivated P/E of 8.5. <br /><br />A motivated P/E of 15, which you wonder about, would then be 15 - 8.5 = 6.5 / 2 = 3.25% of yearly revenue growth in the company.<br /><br />This is just a rule of thumb but to me it is an important value to get a feeling for how undervalued a company is in comparison to their revenue growth.<br /><br />The range comes from a very loose translation by me of what Lynch once said that he wants a P/E of 3 years of growth. That value comes from that I write in an expected growth value for the company and make the calculation.<br /><br />So the motivated P/E provides two things. Approximately how undervalued is the company? With a factor two? three? and also it gives an indication for when one should consider to sell the company.<br /><br />If you want to know more details about the formula of Graham then you should get hold of his books. They are definitely worth reading.<br />Fredrik von Oberhausenhttps://www.blogger.com/profile/10924238593055161520noreply@blogger.comtag:blogger.com,1999:blog-2949218657849719987.post-3970218802001124662014-08-03T20:03:41.186+01:002014-08-03T20:03:41.186+01:00Hi sorry, but what makes the motivated P/E between...Hi sorry, but what makes the motivated P/E between 9-12? How do you calculate that? If you have an P/E of 15, what is then the motivated growth rate?? :)<br /><br />ThanksAnonymoushttps://www.blogger.com/profile/02188010282269378960noreply@blogger.com