BlueArc is expensive, NTAP is cheap.
Look what I wrote to someone else.
NTAP worth 6x current Price: NTAP EPS GROWTH RATE is 498.14% and PEG ratio is 1 to 6 =0.17
siliconinvestor.com
Arly, this is March 2001 not last year, you are calculating the YOY(2002, 1999) not target prices for 2001 to 2003.
You have to look forward. Future PRICE performance is the EXPECTATION OF FUTURE STREAM OF EARNINGS discounted to the current
market PRICE. Not a report card on how well the company did last year. If it was just a trend for last year, then no one, not even the ANALyst would
be asking companies for FUTURE GUIDANCE GOING FORWARD, and come up with FUTURE EARNINGS ESTIMATES and FUTURE
WHISPER NUMBERS. Instead, like your YOY cast backwards method, you would try to think of a trend line based on treasury or other 5% low
interest rates as if stocks were simple ROI return on Investment interest CDs or bonds paper, and they are not like bonds, they are living, not dead and
over with like bonds, they are living, Growing, Earning, companies with hopefully BRIGHT FUTURES.
That is why PEG ratios (P/E compared to Growth) and EPS GROWTH RATES are all forward projections based on future earnings estimates as
opposed to the PAST P/E you are thinking of which is a TRAILING, as opposed to FOWARD LOOKING calculation. Like Straw, your calculation
shows what the price SHOULD HAVE BEEN, not WHAT IT OUGHT TO BE. NOT WHAT WE EXPECT IT WILL BE IN THE NEAR
FUTURE. Earnings estimates and PEG ratios and Future guidance are all about FUTURE TARGET PRICES.
Put NTAP in the [Quotes] box above left, and then go to financials, and you will see the Growth chart as follows:
< siliconinvestor.com >
GROWTH RATES
_______1 Year_____3 Years
Sales %__100.16_____ 83.78
EPS %___ 87.72_____498.14
You take the P/E and divide by that 498.14% to get your PEG ratio of 1 to 6.
What does this all mean: NTAP's current price is OVERSOLD and UNDERVALUED in this very down trodden market. It should be at least 6x
higher. If you think it deserves a PEG of 2 instead of the norm of 1, then it ought to be even 12X higher than it is now, which is possible, since
STORAGE IS A GROWTH SECTOR.
Additional proof that others agree with these PEG ratios is that NTAP was $152 just 6 months ago.
Conclusion: NTAP is a SRONG BUY. If you get a list of the Nasdaq 100, I think NTAP, based on growth, is the best stock listed, I sent out a challenge
for anyone to find me a better growth stock in the Nasdaq 100 or S&P 500, and I would buy it. So far, NTAP remains the winner. Markets wise up fast,
and that means at these low prices, NTAP is a buy, remember, be choosy, BUY LOW, sell much higher.
I am,
Truly your$,
-Crystal Ball
P.S. While this is off topic to AMZN, no matter when Amazon executes its business plan, all the way there it will have to store all that customer data it keeps on each of us every time we visit, keeping track of every page we hit, every product we are intersted in, and when, etc., that is all going into a database data warehouse, for later data mining, that all takes storage, lots of storage, like NTAP. |
