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Technology Stocks : Cymer (CYMI)
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To: F. Lynn who wrote (7201)10/29/1997 6:10:00 PM
From: Curlton Latts   of 25960
 
Nathan: IBM's P/E is currently ~18, while CYMI is ~13.5 on '98 EPS

See IBM's P/E here: quote.yahoo.com

The market price of a stock trades on expectations, however, and not hindsight. CYMI given just recently received accelerating orders and admittedly non-updated, way conservative 1998 EPS estimates is more likely to earn $1.95 per share in 1998 for a resulting P/E of only 13.5!!! CYMI got its big $172.5 million financing proceeds at only something like 3.5% cost because of CYMI's phenomenal earnings growth prospects - so at a cost of only 3.5% why shouldn't they invest in their stock at a yield of 7.6% (1.95/25)? IBM is doing it under a lot less attractive financial return yields and their stock has jumped big because of the vote of confidence that Wall Street views this to be. In CYMI's case they probably couldn't buy back many shares anyway before it would *break the backs* of the excessive short interest and the stock would kite up like a jet propelled rocketship.

Finally, Nathan I noticed your profile has only one other post, to wit: "E-Trade does charge interest on short positions, and I find this irritating". Heh, heh. Why am I not surprised that your only other post is spoken about the trials and tribulations of being short in as old turkey said "a bull market you know"?

Good Luck To Each And All

Curly
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