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Technology Stocks : Intel Corporation (INTC)
INTC 37.81-4.3%Dec 12 9:30 AM EST
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To: xstuckey who wrote (14270)3/15/1997 5:25:00 PM
From: Ibexx   of 186894
 
X and all,

Since we are on the subject on p/e, let me throw something out to provoke your thoughts.

Once a Wall street insider told me that the real "P/E" they use to do company valuations is obtained by using the following formula (a simplistic version, of course):

"P/E" = price / earnings - capital expenditures + depreciation*

(The last term*, with its appropriate tax consequence, goes into the accounting books.)

They say--and I quote--when you use this formula, the "P/E"s for diverse technology companies such as Intel and MSFT work out to be the same. And this also partially addresses the issue of p/e ranges.

I can accept this conceptually, but have never sit down to do the calculations.

Ibexx

PS: Konrad, this is all I know, in case your mathematical enzymes are induced.
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