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Planet Hollywood went public in 1996 at $18 a share, representing an enormous multiple of earnings.
"This could involve imposing limits on mortgage lending to potential homebuyers as a multiple of earnings, also demanding banks hold greater buffers against lending," says economist Howard Archer.
Lately, the stock of St . Pauland other commercial insurers has sold off a bit; it continues to trade below the industry's average multiple of earnings.
Public companies are typically valued at a multiple of earnings, and the interest payments associated with high leverage may all but eliminate earnings.
The general principle of pricing media properties on a multiple of earnings could be replaced by an equation based on the size of the buyer's ego.
Scepticism about Nestlé's prospects can also been seen in its share price: its shares trade at a lower multiple of earnings than those of its main European competitors.
Similar(9)
GE would buy loads of companies priced at ordinary multiples of earnings.
"Most of these companies are trading at very low multiples of earnings," said Damien Conover, an analyst at Morningstar.
Even during the best of times the shares of financial services firms trade at lower multiples of earnings than those of advanced industrial companies.
Stocks are trading at historically high multiples of earnings, with the S.& P. 500 now selling for 25 times its estimated 2000 earnings.
Depending on the industry, some have used multiples of earnings, multiples of book value, and in recent social media valuations multiples of the number of clicks a website registers.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com