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Non-Tech : Buckeye Cellulose - BKI Low PE- High Growth
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To: Mark T. Heath who wrote (5)8/16/1997 1:32:00 AM
From: Carl R.   of 28
 
Welcome. Actually though, I have to ask how you stumbled onto this thread. Did you search for BKI? Or did the cellulose catch your eye? Or were you following another post of mine from some other thread? For some reason when I created this thread I figured it might be a bit slow... <vbg>

Analysts have raised estimates for FY1998 which just started July 1. Former estimate was $2.91, it is now at $2.96 with a range of $2.90 to $3.00. Interestingly estimates for FY99 are $3.42. So at the close of $39.50 the trailing PE is 14.16, the PE based on the next 12 months is 13.34, and the PE based on FY98 is 11.55. If they make the $3.42 number that implies a growth rate in earnings of about 11% a year. Historically the PE ratio has been between 9 and 13, but with the average PE in the dow headed for 25 I don't think a PE of 13 is unreasonable, which puts the stock at 41.5. In fact it wouldn't surprise me to see the PE move a bit higher than that as the street gains confidence in this stock. A PE of 15 based on FY98 would put this stock at 44.

Incidently, I note that as the market moved down, this stock moved up smartly today. The biggest trade of the day was the final one, a market buy at the wire at 39 1/2 of 4000 shares.

Good luck, and keep me posted on happenings in Ohio,

Carl
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