Most stocks are fit for short term trading. Not every business will compound wealth over the long term. Some commonly used proxies for long term compounding 'potential' (in alphabetic order) ::
Cash flow per share
Earnings per share
Scientists per share
Tweets per share
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When we put a high multiple to sales, the most important thing to worry about is - what could disrupt those cash flows. A lower multiple to sales (like a 1x or 2x) justifies Yo-Yo cyclicality and 10x sales implies relatively stable gross margins, cash flow and business economics.
It's amazing \U0001f60a 25% NP
— Avinash (@Aviral_Bharat) February 17, 2022
$8b revenue
$2b Profit
$92b MCap
At 11 times revenue, it seems to be cheap compared to\U0001f609
You offer me 80% cost arbitrage (discount relative to Japan/EU/US) along with low confidence / assurance on Critical Success Factors and I won't give you a single NCE/NBE to discover, develop or manufacture. Capex/opex arbitrage is too low in the disruptive-science-pecking-order! https://t.co/O2l8dK4BUv
@unseenvalue Given high capex/opex cost structures of US/Japan/EU, how will they be able to compete with Indian API companies? https://t.co/OYhC2PUZpL
— Hiren (@hiren_investing) August 11, 2021
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