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Technology Stocks : Semi Equipment Analysis
SOXX 309.40+1.0%Dec 5 4:00 PM EST

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To: Bill Cotter who wrote (2339)3/20/2002 8:38:04 AM
From: Sun Tzu  Read Replies (1) of 95531
 
> Re your valuation model, will it work for individual stocks?

Absolutely! In fact this is one way to compare cross industry stocks to one another. But the number is not meaningful in itself. It is only usefull if you compare it to its historical values or the industry or to some other stock.

Also, you are taking out the future expectations out of the model. If you have an estimate for the next year's revenue growth, then use it. Otherwise, use the historical growth. So in case of PG:

(1.10^2 * 0.13)/3 = 0.0524

Sun Tzu
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