About Earnings Per Share and PE Ratio-What happens?

sprite said: "Have a coupla questions. I've looked at this supposedly penny stock Foamex International Inc. FMXIQ . PK Heres the yahoo finance link: [url]http://finance.yahoo.com/q?s=FMXIQ####[/url] Before May or so, it was trading well over $1 -$4.89, then in late May, it dropped to a PENNY or so. Now it shot up back to rougly $2.7x- $2.9x. And I notice the EPS is -1.16. To calculate the PE Ratio, currently it would be $2.96 divided by -1.16 , which equals $-2.55. So basically this means the company is losing money, and losing $1.16 for every share, correct? I've read that the PE ratio "doesnt matter" as much because of its accuracy or usefulness in valuing the stock. My other queston was, since its EPS is -1.16, does it mean if I put in $100 to buy at $2.96, I'll lose $100 right away because its earnings per share is negative, regardless if the stock price ($2.96) went up to $4? Do I still have a gain per share even if that EPS is negative? Lastly, side question, theres a #### at the end of the ticker symbol, does that mean its a non US company? And if so, can it still be traded on Scottrade like a regualr stock paying $7 per trade? That goes for any other stock with a .XX Thanks"

Goldmember25 said: "[QUOTE=sprite]Have a coupla questions. I've looked at this supposedly penny stock Foamex International Inc. FMXIQ . PK Heres the yahoo finance link: [url]http://finance.yahoo.com/q?s=FMXIQ####[/url] Before May or so, it was trading well over $1 -$4.89, then in late May, it dropped to a PENNY or so. Now it shot up back to rougly $2.7x- $2.9x. And I notice the EPS is -1.16. To calculate the PE Ratio, currently it would be $2.96 divided by -1.16 , which equals $-2.55. So basically this means the company is losing money, and losing $1.16 for every share, correct? I've read that the PE ratio "doesnt matter" as much because of its accuracy or usefulness in valuing the stock. My other queston was, since its EPS is -1.16, does it mean if I put in $100 to buy at $2.96, I'll lose $100 right away because its earnings per share is negative, regardless if the stock price ($2.96) went up to $4? Do I still have a gain per share even if that EPS is negative? Lastly, side question, theres a #### at the end of the ticker symbol, does that mean its a non US company? And if so, can it still be traded on Scottrade like a regualr stock paying $7 per trade? That goes for any other stock with a .XX Thanks[/QUOTE] you don't lose $100 right away ... aaa Foamex International Inc has more current liabilities then current assets... not a good company to hold :) [url]http://www.foamex.com/FMX10K05FIL.pdf[/url]"

trickynick said: "We ignore the P/E ratio if the earnings are negative. And if we are smart, we ignore the company along with it, particularly if the company is BANKRUPT like this Foamex company is. This stock is very likely to be cancelled with little or nothing left for common shareholders, stay away. [quote=sprite]My other queston was, since its EPS is -1.16, does it mean if I put in $100 to buy at $2.96, I'll lose $100 right away because its earnings per share is negative, regardless if the stock price ($2.96) went up to $4? Do I still have a gain per share even if that EPS is negative?[/quote] The money you spend purchasing the stock has no direct connection to the company's cash accounts. But you ARE likely to lose money if you buy this for a different reason, namely the company is a piece of shit. I don't mean to flame you but that you would ask a question such as this indicates such a profound lack of understanding that you have a LONG way to go before penny stocks are even on your radar screen (real stocks probably, too). Go read a book or read some investopedia.com tutorials or something."

sprite said: "If theres no direct connection to the company's cash accnt if the stock is up, then that means while the EPS is negative, people can still make some quick cash on selling it short right? Say for example if you bought it for $1, and it went up $5, you'll STILL make $4 a share right? I'm not saying for this company in particular, but in general."