Here are some ratios for CSCO, LU & TLAB (from Merrill Lynch)
CSCO PE 1998, 1999, 2000 = 107,85,66
CSCO Projected Growth Rate = 30%, Year 2000 starts July 1999
LU PE 1998, 1999, 2000 = 71,55,42
LU Projected Growth Rate = 20%, Year 2000 starts Oct 1999
TLAB PE 1998, 1999, 2000 = 59,43,33
TLAB Projected Growth Rate = 30%, Year 2000 starts Jan 2000
It is clear that TLAB is trading at a huge discount to both CSCO and LU (note the lower growth rate for LU).
If TLAB had the same multiple as CSCO, it would be 80% to 90% higher.
A similar result is obtained from LU comparisons if one figures in the lower growth rate.
So why is TLAB trading at such big discounts? Perhaps, size does matter. |
