(NYSE:AMR) AMR Corporation has high expectations for 2007. By years end, AMR is projected to have a P/E of 6.00 at its price today. Currently, their P/E ratio is around 42. This is some major growth for 2007. While, I am writing this AMR is up 2.21%. Of course, this is the day the DOW is currently up 104 points. After, a week of a minor slide in the markets.

Assuming, AMR Corporation does have the massive growth they expect. How much higher will the stock go from today’s price? At buying the stock at its price of 33.62/share. With earnings/share of 5.43 by years end. Now, we will have to figure out. What will the companies P/E be at the end of 2007? Today, the companies P/E is 42 and their forward P/E is 6.19.

What we are trying to do. Is figure out what P/E AMR be trading at by years end. To determine their future price. NOT what their forward P/E is. Next year, if AMR has a P/E of 12 with earnings/share of 5.43. The stocks price will be 65.16.

If you take AMR Corporation Ave P/E for the past ten years. You will get an average P/E of 6.08. This formula maybe skewed. Since, AMR has had negative P/E’s for many of the past years. So, I am going to take the industry’s current P/E average of 15. Just to be conservative. I’m going to take a few points off of the 15. Let’s say 11. So next year, I am officially saying, I think AMR Corporation price will hit 59.73 from 33.62. All assuming a earnings/share of 5.43

Hey Guys,

Today, I was looking up stocks in the residential construction industry. These stocks have been beaten up lately. I did find one stock that I plan on watching for in the future,”TOA” Technical Olympic USA, Inc. This industry is so beaten up by interests rates and the decline in home buyers. I really don’t know how much farther these stocks can drop. I believe interest rates are going a lot higher. Within the next 5 years or so. Which would result in less home buyers, I would think. As of now, I believe a lot of these residential construction companies are somewhat undervalued. Compared to the overall markets valuation, which I believe is overvalued, now.

Anyways, TOA – Technical Olympic USA financials are looking pretty solid so far. FYI, I haven’t yet done an in-depth analysis. I plan on doing it in the future. This is like a rough draft.

MSN reports this company of having a debt/equity ratio of 0.24. Which is pretty good compared to their industry. The company itself reported that they had earnings per share of 1.13 and 1.10 diluted, in the second quarter. Which is better than 0.82 and 0.79 diluted from year to date earnings per share. Out of the first 6 months this year. They have had a net income of 122,600,000. Compared to last years first 6 months net income of 72,100,000. Also, MSN reports this company of having a P/E ratio of 2.40. While TOA stock price is at 11.03 currently. MSN reports a book value of $18.44 a share.

This company looks like, its financial statement is in good health. Growth has been continuing almost everywhere.  Also, at a first glance without in-depth analysis. The company looks like it has less risk associated with it. Than a lot of other residential construction companies out there. I just don’t know, how much more can the economy keep beating this industry down. Anyways, do your own homework on TOA. Then maybe ask an advisor about it.

Thanks for Visiting.