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Technology Stocks : HMT Tech..281% sales growth at a trailing PE of only 17
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To: Dontin Wang who wrote (273)8/29/1996 8:50:00 AM
From: RT   of 317
 
Dontin,

It is difficult to clearly define short term and long term. What I meant was this: Given the very high growth rate of HMTT earnings it should command a high PE. However, since the biggest company in the group is commanding a PE of only 7, there seems a very small likelihood that HMTT will run out of this price range soon. However, given enough time it should command a minimum PE of 20, which will correspond to price of about 28. When will this happen depends on when the institutions decide that the overcapacity problem in this group has gone away. Remember, STMD has just put in a new plant, and both HMTT and KMAG are expanding capacity right now. I hope it beomes clear in less than one year that the new capacity is justified to serve the increased demand from internet servers.

Regards
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