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Technology Stocks : SEER, Seer Tecnologies
SEER 1.8400.0%Dec 26 3:59 PM EST

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To: John Posatiere who wrote (16)10/28/1997 12:07:00 AM
From: Walter High  Read Replies (1) of 36
 
John:

I don't tend to put much stock (no pun intended) in PE ratios when a stock has earnings of only a few pennies. It would not at all be unusual for a company to report earnings of five cents one quarter, then jump to twenty-five cents the next quarter if things go very well. That would be five times the previous quarter.

A stock that was earning forty cents, though, would have an absolutely nil chance of jumping to two dollars from one quarter to the next (which represents the same percentage increase). PE ratios just don't seem to make sense when earnings are below ten cents a quarter.

Any comments on this perspective? If you don't agree, I would love to hear your views.

Walter High
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