Sat Jan 28, 2012
By the way, I put on my CPA hat to respond to those of you that have lready sold GM or doubt the prediction, read on....
Ford is trading at 12.21 with a book value of 1.57 so it is 8.09 times book value
GM is 24.37 with a book value of 21.96, if GM sold for 8.09 time book it would be 177.65 !
And if that is not weird enough
Ford has a P/E price earnings ratio of 7.32
GM has a P/ E of 5.33, if GM sold for a P/E of 7.32 it would be
7.32 x 4.57 = 33.45
And if that is not enough
GM has a debt equity of 25% a mere $9 billion in long term debt
Ford has a debt equity of 95% $104 billion in long term debt! Alan hocked the whole enchilada!
to me this is a classic cases irrational valuation!
My conclusion is that my target of 30 is if anything, conservative!
I welcome reader comments on this one....
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