Hi Guys, I was reading this book “Fire Your Stock Analyst…” (which is ironic, because I hope to be one myself someday), but anyways, I was wondering how one can use the implied growth formula for negative PE stocks. Is there any way to use this formula or should I just go about using other valuation methods?
Just for your information, the formula mentioned is a derivation from Ben Graham’s Intrinsic Value formula:
Implied Growth Rate = [P/e * (AAA/8.8)] - 4.5
Where: AAA is the corporate bond yield.
(but I’m sure y’all already know this formula anyways)