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Technology Stocks : Wind River going up, up, up!
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To: Joe Smith who wrote (1159)5/29/1997 8:31:00 AM
From: Mark Brophy   of 10309
 
That's a very high growth rate and needs to be put in perspective.

Wind River is currently earnings 47 cents and if that increases 54% annually, the company will be earning $4 in 5 years. Microsoft has the fastest long term growth rate of any company in the history of the software industry and they've grown 50% annually. Intel has grown 30% annually.

If Wind River meets the projections of Allen Benn and me and grows 40% annually in the next 5 years, the company will be earning $2.53 at the end of the period. The P/E will probably be 25 and the stock price 63, which represents 13% annual growth, which is slightly higher than the 12% growth you can get in an index fund with far less risk. If the growth rate slows down to 35%, the stock price will be 53 in 5 years for a 9% annual growth rate. Compaq is a better deal with a likely 17% growth rate.

If you bought at the time of the secondary offering last summer at 18, you've nearly doubled your money. Sell out and find another stock that's going to double in the next 9 months!
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