Hi Trainers, I know we should avoid oil and gas companies as they tend to have lumpy earnings and the business model is hard to understand. But is there a way to value them ? P/b or perhaps p/cf? Or things to take note?
Hi Alex,
You can either use their PB ratio or use average earnings multiply by average PE to get their valuation.
if PB ratio, what ratio are we looking at?
Hi Ashz, what do you mean by “what ratio are we looking at” because PB is a ratio by itself
as in, what is the number? 0.5? or 0.8?
I would think you have to look at similar companies or the company’s historical pricing. But do note the cyclical nature.
*historical valuation (PB)
Hi Ashz,
There is no fixed number to it. As what Jieren had mentioned it is based on similar company average and the own company average.
Thanks JR
welcome :)
Please login or Register to submit your answer