Tags: development, index, price, ratio, research, stock
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Price/R&D Ratio equals to current market capitalization divided by last year R&D expenditure.
This ratio is very important to evaluate research based business. For instance a pharmaceutical company has to invest heavily in research to replace its product as they lose patent protection or become obsolete.
Of course not all research can succeed in delivering good results, so there is no guarantee that a company with low P/R&D ratio will produce great earnings in the future.
Research and development are booked as expenses. Money which is gone like what if it was spent on electricity or heating.
This is not entirely correct, specially for Internet companies.
A transportation company that buys a new truck books it as an asset that will make money for them over its lifetime. Only the depreciation of the truck will be booked every year as expense.
An Internet Company adding a new function to its website has to book the investment as expense.
A functional website looks more like an asset than an expense. It can be a money making engine like google.com or Ebay.com . In my opinion money used to buid a new google.com feature should be booked as an asset improvement .
Ok now is time to sell ASIA shares (47% up!) October 29, 2007Posted by deminvest in ASIA Asiainfo, China stock, growth stock, my free stock, nasdaq, Nasdaq stock, Single stocks, stock I own, stock ratios, stocks.
On Thursday ASIA Info announced excellent earnings results of $ 0.11 per shares. Analysts had expected $0.08 per shares. One would expect that the share price would go up with such good news… Well it didn’t happen after the announcement… because it happened right before. There were so many insider traders who knew about those results… that stock price went up 35% during the two days before earnings announcement!
Asiainfo ASIA up 25% in 2 days before earnings. Did I learn from mistakes made with Apple and Va Software (LNUX)? October 24, 2007Posted by deminvest in AAPL, Apple, China stock, growth stock, investment, risky investments, stock I own, stock ratios, stocks.
It is happening again: stock is showing outstanding gains right before the company reports on quarterly earnings. Asiainfo Holdings Inc. (ticker ASIA) is a Chinese software House that develops software mainly for Telecommunication companies.
Asia Info will “Announce Third Quarter 2007 Results on October 25, 2007” so on 23 and 24 October stock price skyrocketed up 25%, and hit my target of 40% raise since I bought it on February 2007. (more…)
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RIO Companhia Vale do Rio Doce is a South American metal mining company whose stock, for some reason, went up 40% from my buy price.
I have a strategy that makes me sell enough stock to get my capital back when a stock reaches 40% gain. That is why I sold 30 RIO shares at 36,32 USD each, cashing USD 1089,6. I had bought 42 RIO on February 6 2006 for 1039, so I got back my money plus trading expenses and I still have 12 RIO for FREE.
Often in our little discussions we use some symbols related to stocks. YoY (or yoy) means Year on Year. It compares a certain comany perforamance figure between this year and the previous year. Example: (more…)