Valuation - Omitting certain metrics on purpose?
Hi,
This has been happening many times so I thought I would mention here.
We get the interns to pull out some basic metrics on comps to do a subsequent analysis on. I don't know how this has not been filtered but now and then I find outrageous outliers on one or two of the companies (out of say, 20) which really destroys how the valuation or more transparently, how the football field looks.
I was chasing an hour deadline for a small client the last time so I just deleted the particularly 'outrageous' outlier (P/E to be more specific) without deleting the company. I am now faced with a similar problem where if I delete the particular P/E the football chart looks better. So:
I know the onus is on me to not be lazy and correct it without trying to mask it but how bad is it really to delete one metric without deleting the whole company?
Edit; I mean the outlier as in the outliers for maximum and percentiles
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