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Technology Stocks : KEMET Corp.
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To: Jack Hartmann who wrote (771)10/24/2000 1:13:28 PM
From: The Ox  Read Replies (2) of 906
 
One should keep in mind that most of the semi industry is getting hammered today because of the NSM warning.

Assuming $4.20 eps for FY01, the ML target, and assigning a low multiple like 10PE, gives a $42 target. If we look at the implied ML eps growth rate, they are expecting 13% growth from FY01 to 02 ($4.75). A 13 PE on $4.75 would yield a $62 stock price.

I suppose one must base their decisions on short term expectations these days but IF the market is working it's way back into a more traditional valuation process, KEM looks like a bargain at today's prices. Even at 5% sequential revenue growth per quarter, the stock appears undervalued.

The real question is are ML's estimates too high?!?

JMO,
Michael
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