How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 487.10

-0.1%

Dec 29 3:59 PM EST

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To: Timetobuy who wrote (60385)	8/7/2001 12:16:48 PM
From: David Howe	Read Replies (1) of 74651

<< If msft were to trade down to a peg of one >> There is no time in history where a company such as MSFT with their cash position, dominance in their industry and probable growth of 8% - 15% traded for a peg of one. MSFT would be trading right around book value if it traded at a peg of one. That would give no value to the business side of MSFT and that would be totally ridiculous. You'll won't see MSFT trading at a peg of one unless the growth rate accelerates to around 30% (obviously unlikely) and even then, I think the PE would increase fairly significantly. So, I guess I'll predict that MSFT will NEVER trade at a peg of one unless almost every one of the positive aspects of their business completely evaporate. Most companies don't trade at PE's below 10 unless their growth is NEGATIVE or neutral and shows no signs of significant improvement. That's NOT the story with MSFT. IMO, Dave

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