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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Seeker of Truth who wrote (44723)7/20/2001 7:28:15 AM
From: 100cfm  Read Replies (2) of 54805
 
I'll further assume, that since SEBL is a gorilla, that it will grow at 25% per year for a decade.

That's a wild ass assumption.
In this market one should not assume anything that isn't the here and now.
Growth rate IS 12%. Earnings ARE 60 cents.
Put a multiple on the growth rate you are comfortable with.
For me 2X growth is about as high as I would pay for any company regardless of their DNA. That would put SEBL's value for me at $14. But everyone will have their own level of comfort and may be willing to pay more or less.

Fear of missing out on a Gorilla should not be a factor in anyone's mind right now. A Gorilla is longterm and if management proves to be too conservative and growth jumps more then expected one qtr, you still have time to buy it and hold it for the next X amount of years.

As the market and growth rates recover we need to continuously adjust our calculations. As of this moment in time SEBL is over valued as Mike states, thats as far as I'm willing to go. When something changes such as the economy, a new bull leg, SEBL's forward looking growth rate, then I'll recalculate and go from there.
But for me at the present, it's what is the here and now, not what could be next year or 10 years from now.

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