Industria de Diseño Textil, S.A.’s (BME:ITX) Share Price Could Signal Some Risk
When close to half the companies in Spain have price-to-earnings ratios (or “P/E’s”) below 18x, you may consider Industria de Diseño Textil, S.A. (BME:ITX) as a stock to potentially avoid with its 24x P/E ratio. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
Industria de Diseño Textil could be doing better as it’s been growing earnings less than most other companies lately. One possibility is that the P/E is high because investors think this lacklustre earnings performance will improve markedly. If not, then existing shareholders may be very nervous…
