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Technology Stocks : Intel Corporation (INTC)
INTC 47.84+2.9%10:08 AM EST

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To: Dr. Bob who wrote (7575)1/8/1997 5:28:00 AM
From: Kevin OBrien   of 186894
 
Stcok splits can act as an implied effective large PE increases. Your observations are borne out globally over my 25 years of research. Whenever an anomolous apparent huge undervaluation occurred in investment grade stocks this was not taken up my an increase in price but by a swift stock split. If that was not to occur the company would be exposed to takeover. Massive price movements are not so easily made because of liquidity.

My valuation formula shows INTC to require a 3 for 2 split to make sense of its present numbers or more than an immediate doubling in the price. After the split the shares would retain their present levels adjusted for index movements.

I am just bring some of my work up to date again prior to selling it and this anomaly has popped up.

Kevin O'Brien
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