Lexmark Intl. (LXK) Message Board

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Technology Stocks : Lexmark Intl. (LXK)

LXK 40.49

0.0%

Nov 29 4:00 PM EST

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To: Chad E. McQuillen who wrote (23)	1/21/1997 8:03:00 PM
From: Fred Fahmy	of 160

Chad, << I thought earnings looked pretty good today.>> I think this is an understatement. I thought the earnings were excellent. I think today's drop was probably a combination of profit taking and pressure from the pending secondary offering. Based on trailing earnings LXK's P/E is now around 16. Based on current 1997 estimates (which will probably get raised by a few cents) the stock is trading at a PE around 13. This has to start looking very attractive to value investors. In today's market these types of P/E's are extremely low especially given the EPS growth rate. According to the S3 filed with the SEC, the secondary offering will probably happen next week. BTW, this isn't the first time that LXK's price dropped on the day of earnings announcement. Usually, however, it recovers and then runs up for about 10 days before peaking. It will be interesting to see what happens this time given the secondary offering. The fact that none of the management has chosen to participate in the secondary offering is a very bullish sign IMO. Good luck to all, FF

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