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Technology Stocks : American Power Conversion

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To: trilobyte who wrote (1242)	4/25/1997 7:31:00 AM
From: w0z	of 2574

Good job trilobyte. Just a simple minded extrapolation of $0.22 times 5 (20% of full year revenue in Q1) yields $1.10, assuming they maintain the same margin run rates as in the first quarter. Actually, they should do better because of increasing revenue per quarter and benefit from some economies of scale. Another simple whack at it is full year 96 EPS of $0.98 times 1.2 or $1.18 assuming 20% revenue growth and relatively constant margins. On top of this throw in some conservativism to allow them to overperform (and avoid more lawsuits by stupid shareholders) and you're not too far from the current First Call consensus of $1.23. At $19, that's a trailing PE of 19 and a forward PE of 15. With the company growing at their stated rate of 20-25%, it's a bargain at $19. First Call shows average long term growth predicted by brokers is 27.5% and a historical 5 year growth rate of 38.5%. I'd rather have my money in APC with a PE/Growth ratio less than 1 than many of the Dow components that are far greater than 1!

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