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Technology Stocks : Intel Corporation (INTC)

INTC 33.63

-4.2%

3:59 PM EST

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To: jmac who wrote (86235)	7/27/1999 10:22:00 PM
From: Fred Fahmy	Read Replies (2) of 186894

jmac, Re: CSCO and P/E Most stocks have current P/E's higher than historic levels...and IMO there are good reasons and justifications for most of these (good sustained earnings, good future prospects, and most importantly unprecedented excellent macro economic conditions). In addition, in INTC's case, their historic P/E was unrealistically low given their historic growth and dominant position. I think this was mainly because the Kurlak's of the world couldn't separate the commodity chip makers (like MU) from the proprietary chip companies (like INTC). In CSCO case (and keep in mind I think it is one of the finest companies in the world) their P/E has really escalated in recent years. CSCO use to have a P/E of 35-45, more in line with their growth prospects. It has only been recently that it has climbed to nearly three times those levels. I just don't see how CSCO can justify a P/E around 100, especially with a new giant competitor (LU) emerging in recent years. FF

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