05-04-2020, 02:53 PM
(05-04-2020, 02:46 PM)Otter Wrote: PFE has grown earnings by an average of 4.85% annually over the past 20 years (as far as I can go back in FAST Graphs). 20 years ago, PFE traded at $45.15 with a P/E north of 43. Today it trades at $37.71, but with a P/E of around 13.2. If PFE had traded at a rational earnings multiple of 15 or less 20 years ago, investors would have enjoyed positive total return over the intervening 20 years (although not market-beating).
The chart for PFE (and a lot of other bubble stocks from the late 90s) is a helpful reminder any time I am tempted to buy DG, MSFT, WMT, and many others I would like to own, at present valuations.
I get what you are saying completely, but not sure why DG is named there. It's growing EPS at a double-digit rate and has a PE of 23 on FY21 estimates of $7.52 in earnings. It's expensive, but not outrageously so considering its growth rate.