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[sharechat] value, or mayhem?


From: Holden Glova <dsafari@paradise.net.nz>
Date: Fri, 27 Sep 2002 21:45:31 +1200


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Hi all,

I've been watching GHG on the ASX for the past few weeks and have noticed that 
it continues to go down. The P/E ratio of 76.6 is way way over the sector 
average of 11.95.

The EPS is .3 cents while the DPS is 6 cents.

Over the past 5 years the P/E ratio has never been close to this high.
It has always paid a nice dividend (currently a dividend yield of 10.3%) with 
only one year in the last five haveing a higher EPS then DPS.

The stock is incredibly cheap right now, asset backing ratio is 0.54. I don't 
think this can go too much lower and it seems to historically always pay a 
decent dividend, the only thing I am worried about is the high P/E ratio.

Should I be worried about this high P/E ratio? Probably the fact that I am 
asking this question highlights that I don't _really_ understand what the P/E 
ratio is. Sure, i've looked up definitions on the web and I understand that 
it is the price divided by the earnings. But I don't know when i see a bad 
P/E ratio and when I see a good one. 

Some basic chart info. When I view all the data available at bigcharts.com 
this company is in a long term down trend and has never seen an up trend for 
any length of time. Is this a sign to shy away from this company totally 
until seeing a convincing up trend? Actually the more I look at this chart, 
the more I don't like this company...However, it does pay a good dividend and 
is very cheap! Perhaps the market just hasn't realized the potential of this 
company?

Any insights into GHG and P/E ratio are most welcomed.
- -- 
Signed,
Holden Glova
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