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Non-Tech : AMERITRADE HLD A (NASDAQ:AMTD)

AMTD 0.980

-3.0%

Jan 30 3:41 PM EST

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To: Catcher who wrote (654)	1/9/1999 3:26:00 PM
From: DavidCG	Read Replies (1) of 1848

AMTD now trades 6900 times earnings. And I don't know where it will stop.. who knows, maybe AMTD is worth 10000 times earnings. However, what I DO know, is that there are a few internet brokerages with awesome earnings lagging this sector. Why? there is no analyst coverage of them....YET. Take SWS.. two days ago.. basically no coverage. Then some obscure analyst upgrades SWS from a neutral to a BUY at $22.50 a share.. now SWS is up to $27. Note something.. analysts are BEHIND the CURVE of us small investors. He didn't make it a buy at $16-$18 like I did..he waited several days after the movement at $22. Where is all of this going? How about NDB (National Discount Brokerage) ndb.com ? It announced, 1-2 weeks back record earnings of .42 eps for the second quarter. Last year, the same quarter produced .18 eps. In other words, its GROWTH RATE is 250% over 1 year. That's impressive. NDB then shot up from $14 to $33.50 the day after the earnings announcement. I thought $33 seemed a little too high and a little to fast for my taste. So I shyed away until it came back a little. The good news is that profit taking, or panic from the people buying in the 30's sent this stock back to $17-$18 which to me seems like a huge bargain for a brokerage with a good brand name in this internet discount brokerage sector. Why? There are 14 million shares outstanding and a low float of 4 million. If we multiply .42 X 4 quarters (and I believe EPS from quarter to quarter will increase...not decrease in the coming year) we have a year EPS of $1.68 $17 / $1.68 eps = a P/E ratio of 10 Now call me crazy again..as people did with SWS when IT had a P/E of merely 8-9..but I believe the market is soon going to pick up on this discrepency in low price and drive it into the mid - high 20's. SWS, on thursday, got upgraded from a neutral to a buy and it went from $22 to $27 in two days. No analysts have coverage on NDB yet..imagine what happens when they INITIATE coverage. If it can happen to someone smaller like SWS... it WILL happen to NDB. Again, EGRP is trading at $36 a share these days at 6900 times earnings. Is NDB worth 15 times earnings? 20 times earnings? Remember, internet stocks aren't just valued on earnings.. they are valued moreso on GROWTH potential. NDB has both! You make the call. Good Trading! -DavidCG

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