50 P/E on Regional Banks??

Discussion in 'Stocks' started by robbyusa, Feb 2, 2012.

  1. robbyusa


    Has anyone ever heard of such a high P/E ratio for regional banks? I was looking at PFBX. Its EPS numbers have gone from $2/share in 2006 to $0.29/share in 2010 and $0.33 in 2011. This company is obviously not growing.....so why the super high P/E? So odd, I hope someone can explain this to me.
  2. You are confused. You think a high p/e is good.

    Not so -


    Price of stock is $10 and remains the same
    Earnings go from $5 a share to $2 dollars a share

    p/e = 10/5 = 2 good
    p/e = 10/2 = 5 not as good

    Of course if earnings went down so would the share price. But the gist is high p/e is not good
  3. People expect the earnings to normalize back to previous levels.
  4. N54_Fan


    I would have to interject that P/E ratios mean virtually nothing in my mind. If a stock has a low P/E it is either hated and undervalued and ripe for a rebound or a shitty stock. A high P/E would mean either highly desired and people willing to pay up for it or it is over valued and ready for a fall. Either way I dont care what the P/E is. All I want to know is are people buying or selling it? I could care less if the company makes cow manure and sells them as a restaurant dessert...As soon as people START buying I want to buy and as soon as they START selling I want to sell.

    just my 0.02.