Q:
By:jkosinsky
Date: 08/27/08
Comment continued:
NDAQ one time annual reduction of P/E from sale of LSE.
Please reply.
JK
A:
Hey jkosinsky,
I looked into it. NDAQ is one of those stocks that’s difficult to look into because when you search the ticker, it loads up bunches and bunches of trivial information that I really could care less about, such as who is ringing the opening bell, etc. I try to keep very little tabs on this one. Here’s an article that I think refers to what you were pointing out: http://seekingalpha.com/article/26885-nasdaq-triples-earnings-on-one-time-charge-eps-in-line
Alright. I looked at it. There was a huge increase in the EPS. Yeah, looks like you’re right. The good news is that it doesn’t change my opinion on the company. It looks like a lot of the sites I reference quickly like http://investing.businessweek.com/ take out these one-time issues so that their data is more linear too. Good Catch. If you look at the picture for this article, you’re right. That clears it up for me. Thanks!
Verdict: The PE ratio really is 8.47. This PE ratio includes a one time huge EPS that deflates what the PE ratio actually should be in my opinion. A realistic PE for this type of growing company to me equates 4x the last EPS to the price, resulting in a PE of 17.01. That said, it’s still a bargain.
Glen