Posted on 09/07/2010 7:04:40 AM PDT by Slyscribe
With Labor Day weekend over, vacations have ended, the kids are back in school and the morning rush hour gets worse as America returns to the rat race. Typically, trading volume on Wall Street also picks up. With the market in a confirmed rally, this is no time to relax. But that doesn’t mean you can’t get serious about investing in companies that calm the nerves and satisfy the palette.
(Excerpt) Read more at blogs.investors.com ...
There is a lot of air under its lofty PE ratio. Maybe the price is deserved, but I can see it falling fast if the economy takes a turn for the worst.
We were talking about problems with PE's on The Decline of the P/E Ratio; it's last year's earnings divided by a price that's based on what we expect next year's earnings to be. The numbers that impress me are:
PE / 5 year earnings growth = 0.5
Return on 5 yr. earnings = 13.2
Return on 1yr. earnings = 21
CMG is no slouch.
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