Non Sequor on 11 September 2007
| FishyJoe said: Well it is the same guy who had an underweight rating while Nintendo was breaking new record profit levels, so he may not be the most informed guy. |
Nintendo has a very high P/E ratio (presumably because people are expecting them to have large increases in revenues over the next few years). However, until that P/E ratio comes down, even the slightest bit of bad news from Nintendo will result in their share price getting raped.
It isn't uncommon for companies that are consistently profitable to have large P/E ratios, but even considering that Nintendo's pushing it. Right now Nintendo is in a position where good news will only help them a little and bad news will hurt them badly.
And anyway, underweight isn't that bad of a rating. It just means that you probably shouldn't buy right now and if you already do have it, you might want to sell a little and take some profit.
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