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Toolkit Low Stock Price projection
Rank: Advanced Member
Posts: 84
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Does anyone know why Toolkit6 will show a negative Selected Estimated Low Price? The price of the stock can't go below zero so I was wanted to to know why Toolkit6 used a negative low price.
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Rank: Administration
Posts: 258
Thanks: 4 times Was thanked: 11 time(s) in 11 post(s)
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The most likely thing I can think of causing that would be if the Estimated Low price was set to use 'Forecast Low Price'. Using that selection tells Toolkit to calculate a low price based on [Selected Low P/E] multiplied by [Estimated Low Earnings Per Share] If one of those numbers is negative, then the entry for Estimated Low price would end up being negative as well.
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Rank: Advanced Member
Posts: 84
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Then why would toolkit not default to zero if you get a negative low price. Because the stock price can only go to zero. Is this something that needs to be upgraded in the next revision?
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Rank: Administration
Posts: 258
Thanks: 4 times Was thanked: 11 time(s) in 11 post(s)
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I'm not sure about a change being necessary, given the number of options available for selecting a low price. If P/E times Low EPS is negative, there's always Average Low for the last five years, Severe market low, 80% of current price, etc.
Taking a step back though, a big part of the SSG is reading the past history, and making judgements about the future. If the low price is negative, and it happened because either Low P/E, or Low EPS was negative, then (to my mind), one of those numbers being negative is a judgement point. Speaking personally, I either wouldn't have gone any further with that stock, or I would have been double-checking my figures, to sort out how I accidentally typed a negative for one of those entries.
On the other hand, if you're OK with earnings being negative (if you're bullish on Tesla Motors, for example), that's fine, but you would then want to make a judgement that P/E times EPS isn't a good way to calculate a future low price for a stock.
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Rank: Advanced Member
Posts: 84
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Thanks for your explanation. However I tried to put in zero in for the low price and it would not calculate from zero. But it will calculate from a negative or positive number but not zero. Why?
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Rank: Administration
Posts: 258
Thanks: 4 times Was thanked: 11 time(s) in 11 post(s)
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When calculating the Buy / Maybe / Sell ranges, 0.00 is treated as a null, or blank space, instead of a number of it's own. The calculation can't be started from there, so nothing gets filled in for the price ranges. Edited by user Thursday, May 26, 2016 2:55:33 PM(UTC)
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