Glenayre Technologies(GEMS)- a pure cellular PCS play? Message Board

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Technology Stocks : Glenayre Technologies(GEMS)- a pure cellular PCS play?

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To: van wang who wrote (1791)	8/29/1997 11:38:00 AM
From: David M. Selman	of 3431

How do you get $17 - $20 from your analysis? Is this a program? Bean counter method is Benjamin Graham/Warren Buffet method. It is as follows for gems: Discount rate for net present value computation: 12% Assumed growth rate of earnings for next 5 years: 15% Assumed growth rate of earnings for years 6-10: 10% Assumed growth rate of earnings after 10 years: 3% Net earnings for most recent fiscal years end (1000's): $70,444.00 Net earnings for prior fiscal year end (1000's): $76,448.00 Stock price/share at which current market value based: $17.06 Outstanding # of shares (1000's): 60,197 Conclusions based on above: computed intrinsic value (1000's): $1,603,349 Current market value of company (1000's): $1,026,961 Margin of safety or (risk) in 1000's: $676,388 Current market value as % of intrinsic value: 64.05% Price per share at intrinsic value: $26.64 The above numbers for earnings estimates are the lowest from analysts covereing the stock. You can really change the value drastically by using a different discount rate. This is basically the risk factor. You would use a lower discount rate for blue chip company and a higher one for small cap company. Discount rate for no risk cd is 6% or so. The lowest discount rate I've seen the bean counter method use is 10% for stocks like Coca Cola or Microsoft. 12% might be a little low for gems. I don't use the fool model except to compare with above model. It usually shows lower value especially with high PE stocks like Microsoft.

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