Shareholders Should Be Pleased With TGS ASA’s (OB:TGS) Price
When close to half the companies in Norway have price-to-earnings ratios (or “P/E’s”) below 13x, you may consider TGS ASA (OB:TGS) as a stock to avoid entirely with its 58.6x P/E ratio. However, the P/E might be quite high for a reason and it requires further investigation to determine if it’s justified.
While the market has experienced earnings growth lately, TGS’ earnings have gone into reverse gear, which is not great. One possibility is that the P/E is high because investors think this poor earnings performance will turn the corner. If not, then existing shareholders may be extremely nervous about the viability…
