Formetal Co., Ltd.’s (KOSDAQ:119500) Share Price Not Quite Adding Up
When close to half the companies in Korea have price-to-earnings ratios (or “P/E’s”) below 10x, you may consider Formetal Co., Ltd. (KOSDAQ:119500) as a stock to avoid entirely with its 17.6x P/E ratio. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
For instance, Formetal’s receding earnings in recent times would have to be some food for thought. One possibility is that the P/E is high because investors think the company will still do enough to outperform the broader market in the near future. If not, then existing shareholders may be quite nervous about the viability of the share price.
View our latest analysis for Formetal
