Biotech Valuation Message Board

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Biotech / Medical : Biotech Valuation

CRSP 55.08

-2.9%

Dec 26 9:30 AM EST

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To: scott_jiminez who wrote (1369)	8/2/2000 10:07:41 AM
From: Thomas M.	Read Replies (1) of 52153

I own the stock of a company which earns gobs of money and which is expected to significantly increase these real earnings for the foreseeable future. It is in a rapidly growing sector of technology. The stock is currently trading at a projected PE of 7.5 for estimated FY2001 earnings (14 analysts) Let me remind you that projections a year and a half out are not real earnings. It would be much more appropriate to discuss trailing twelve month earnings. Is this a chip company? A cyclical stock selling at 7.5 times peak earnings is not cheap. Conversely, a biotech stock that is losing money hand over fist can easily have an undervalued stock price. Tom

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