Saturday, May 30, 2009

Present Value of Growth Opportunities -PVGO




Looking at the current stock price level, it has become clear that the market have few expectations for the Growth Opportunities perspective. Stock Price has been low due to a low capitalized value of expected earnings and due to a low PVGO.
Far from being an handicap for traditional investors, it is in reality a factor which contributes to the high volatility of the market. Any news regarding the Growth Opportunities impact immediately the stock price in the range of 5% to 10%. From PALM to Apple, or from WallMart to BestBuy, any news impacting their PVGO impact the stock price in a higher range than before because the capitalized value of expected earnings is low.