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Technology Stocks : INTC

INTC 38.80

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10:38 AM EST

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To: Ajay Nandanwar who wrote (658)	8/19/1997 7:39:00 PM
From: Harry Landsiedel	of 990

Ajay Nandanwar. Re: Intel's P/E. IMHO part of the reason is that the street factors in capital spending to the P/E. If you add depreciation and deduct capital spending from the net income and calculate a price/"owner earnings", you will see that Intel has a lot higher P/adjusted earnings than CPQ but somewhat lower than Dell. The reason for the difference between CPQ and Dell could be that Dell is smaller and growing much more rapidly. Based on the latest Value Line data, Intel's price/owner earnings is 30.5. 98/$5.75-$2.70, where the $5.75 represents cash flow and the $2.70 represents capital spending. CPQ's price/owner earnings is 25.3 (60.75/$3.00-.60) Dell's Price/owner earnings is 39.0 (84.69/$2.60-.45) HL

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