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Technology Stocks : Intel Corporation (INTC)

INTC 36.78

+2.7%

Nov 26 3:59 PM EST

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To: Nevin S. who wrote (85140)	7/9/1999 1:48:00 PM
From: Harry Landsiedel	Read Replies (1) of 186894

Nevin S. Re: " I think it may have been a typo and possibly should have read 1.7x long term growth rate." I assume you mean 1.7x vs. 3.7x for the S&P 500. That would intuitively make more sense, but when you consider that the S&P is a weighted by market cap and the biggies (except Intel) are selling at much higher PEs to their growth rates, 1.7x may be too low. For example, based on a recent study using Valueline data here are some PE/growth rates among the megacaps: Intc: 1.2 Cisco: 2.3 Msft: 2.3 McDonalds: 2.5 Disney: 2.8 KO: 3.1 MRK: 1.9 My recollection is that EPS growth rates for the S&P range from 8%-10% and the S&P is trading for around 22-25 times earnings. That would make the 3.7x high but not totally outlandish. HL

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