Sentences with phrase «valuation multiples tend»
Valuation multiples tend to increase when confidence in corporate earnings certainty and growth increases.
https://www.financialsamurai.com/ Not exact matches
Based on 20 years of global data and nearly 90 years of US data, the energy sector has never been cheaper on price - to - book multiples than it was at the end of 2015.1 The skeptics» response to these compelling headline valuations tends to be suspicion of book values, which indeed are likely overstated in some instances and vulnerable to further impairment.
The sell - side in these types of situations tends to value companies at peak multiples of trough earnings, and only shifts to the more mid-cycle earnings and valuation we use when there's clear evidence the cycle has turned.
And that's why value investing tends to work: companies with cheap valuations improve, and multiples expand.
Value investors tend to focus far too much attention on this potential change in the valuation multiple, and often ignore what's otherwise a company that offers a poor return on capital.