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Technology Stocks : Nortel Networks (NT)

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To: Northern Cougar who wrote (7981)10/30/2000 9:37:01 PM
From: WiseGuy   of 14638
 
Tech stocks have been given an unfair amount of attention lately. It is time to put the microscope in other areas such as the financials and brokerage firms and analyze THEIR growth rates.

What we will find is that these financial and brokerage firms sport lower PE, but much lower growth rate. Thus, their projected PEG would actually be higher than many tech stocks. The fact that these tech stocks have high PE's really don't mean anything if you don't take their growth rate into account. Higher PE does not necessarily mean the stock is expensive. A stock with a PE of 40 but growing at 40% is not expensive. A stock with a PE of 100 but growing at 100% is not expensive. PEG have to be looked at to determine whether stocks are expensive or not. Frankly, many tech stocks now have quite low PEG's. Sorry for not sounding connected..just jotting what comes to mind.
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