Saturday, August 4, 2007

Forbes Medi-Tech Inc

Forbes Medi-Tech Inc is a NASDAQ listed security that has been trading in a range between $0.54 and $2.67 over the past year. With 38,402,100 shares outstanding, a recent price of $0.66 gives a total market capitalization of $26,113,428. While there are certainly larger companies, Forbes Medi-Tech Inc has definitely earned its place in the pack. Last year, Forbes Medi-Tech Inc created $-0.41 in earnings for every share outstanding.

Forbes Medi-Tech Inc is currently priced by the market at 0.00 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 below $1 a share, Forbes Medi-Tech Inc is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.