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Technology Stocks : The New Qualcomm - a S&P500 company

QCOM 165.03

+1.0%

3:59 PM EST

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To: Keith Feral who wrote (1300)	9/6/1999 11:59:00 AM
From: Mike Buckley	Read Replies (1) of 13582

Keith, I see that we were working on our posts at about the same time. :) Using a 40% growth rate, the "forward" PEG is 1. Using a trailing EPS of $2.05 as defined in my previous post, a 40% annualized growth through FY2000 will produce EPS of $3.12. Divide the stock price of $163 by $3.12 and the "forward" PE is 52. Divide that PE by the 40% growth and the year forward PEG is $1.30, not 1.00. I'm not trying to quibble with the numbers, really, truly. Maybe it's my failing as a valuation junkie, but I think there's a big difference between 1.00 and 1.30. I think you could agree that is very cheap, too. I hope my previous post sufficiently explains why the stock might be fairly valued. Even if it does, I'm compelled to repeat that I don't dwell on "fair value" for gorillas like I do with some of my other stocks. --Mike Buckley

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