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Politics : High Tolerance Plasticity

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To: Timelord who wrote (1270)	3/9/2001 11:51:21 AM
From: Sharp_End_Of_Drill	Read Replies (1) of 23153

I'd debate the HP short based on valuation alone. I don't consider it over-valued at all. Their current price of $57.67 gives them a PE of 31 and PSR of 4.4. Their Q4 net margin was 17.6% which is very good. Next quarter I estimate their revenues q over q will grow 5% and net margin will increase to 20%. This gives forward PE of 25 and PSR of 4.1. Q4 2001 should see PE of 15 and PSR of 3.3. The big difference with these forward PE estimates compared to tech forward PEs is that they are very likely to actually happen. Their q over q revenue growth for the last 3 q's was 11%, 17%, and 8% - so using 5% estimates isn't a bad guess in my opinion. Net margin has gone 12.2%, 13.5%, 17.6% - so 20% also isn't unreasonable. If you are basing your bet on short term TA for a little downside pop then I really can't comment. Longer term this isn't a great short compared to the myriad other stocks out there. Sharp Edit: just read Bruce's previous post that this is a day trade so the above is more or less irrelevant. Good luck - when I saw RIG at $54.2 this morning I almost shorted it for a day trade too - shoulda woulda coulda. Did short GM at $59 looking for a quick cover at $58.

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