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Technology Stocks : Dell Technologies Inc.
DELL 129.39-2.8%10:19 AM EST

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To: Sig who wrote (146841)11/10/1999 7:21:00 AM
From: Lee  Read Replies (1) of 176387
 
Hi Sig,..Re:.valuations

Here is a link and a couple of excerpts from an article in Individual Investor. Apparently the author prefers Chuzz's metrics of operating cash flow to determine value.<g>

Message 11868608

Net Present Value (NPV) analysis, a method consisting of three steps: a period of forecasted cash flows, usually three to five years, a terminal growth rate after the company reaches maturity, and a discounting factor that consists of the risk-free rate of return on 30-year Treasury bonds plus an equity risk premium, plus an adjustment for individual company risk.

It may be easy to manipulate net earnings, but relatively speaking, it?s almost impossible to manipulate operating earnings or free cash flow, which is why I rely so heavily on NPV analysis.

I thought it was interesting because we hear daily about how overvalued everything is and how high some PEs are! <g>

Cheers,

Lee
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