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Weighting trading multiples
I am currently looking at a public company that focuses on a very nice area where there aren't a lot of other public companies that do the same thing as their core business. I'm able to only generate two companies and would like to ideally include five. I have added 3 other comps that have a small p...
I am currently looking at a public company that focuses on a very nice area where there aren't a lot of other public companies that do the same thing as their core business. I'm able to only generate two companies and would like to ideally include five. I have added 3 other comps that have a small portion of their business in the same niche area as the company I'm looking at while their core business is something else. Would it be incorrect for me to "weight" the trading multiples towards the 2 companies that are true comps and allocate a smaller weight on the remaining three or is this practice ok? How do we get around the problem when there aren't too many direct comps to derive good trading multiples?
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by Eric Y.
added 10 years ago
