Tuesday, August 7, 2007

Elbit Medical Imaging Ltd

Elbit Medical Imaging Ltd is a NASDAQ listed security that has been trading in a range between $21.68 and $51.81 over the past year. With 28,254,260 shares outstanding, a recent price of $42.40 gives a total market capitalization of $1,166,335,818. While there are certainly larger companies, Elbit Medical Imaging Ltd has definitely earned its place in the pack. Last year, Elbit Medical Imaging Ltd created $5.11 in earnings for every share outstanding.

Elbit Medical Imaging Ltd is currently priced by the market at 8.90 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share in excess of $1 a share, Elbit Medical Imaging Ltd is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.