This continues to amaze me. Maybe because of old minded analysts looking back to the past bubble, maybe because there is some irrational fear, a wonder is happening:
growth stock are becoming dirt cheap: their revenue and their profits continue to growth, but stock-price lags.
Something really funny is happening… Simple Math: if earning increase, but price doesn’t, the P/E ratio goes down and down and down…
If this goes on, eventually growth stocks will have same (waiting enough even lower…) P/E ratio of lame stock of companies that don’t grow!
Last week I discussed how this weird funny thing is happening with Google and Ebay (I must not forget to buy a pair more GOOG shares).
I thought it was because the “old big men” are afraid of the Internet… But today I found out Genetech (DNA), the Biotech drug company has a forward P/E of 24 only!
A company that is growing Qtrly Revenue Growth (yoy) 43.40% and Qtrly Earnings Growth (yoy):75.10% and Posted today earnings beating expectations, is such a bargain!
It is also a company that has more cash than debts and has revenue coming from a product that does sell even if the economy slows down: Health!
I am so amazed that I don’t want to lose this opportunity.
I will buy $1000 worth of Genetech (DNA) in the next 5 minutes…
It will be fun to see if in 2 years the “old wise men who know everything about the economy” will keep its price stable sending DNA’s P/E go under 10!
BUY, SELL, KEEP 
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