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Technology Stocks : Seagate Technology
STX 292.00+5.2%4:00 PM EST
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To: Certafied who wrote (4040)11/8/1997 3:46:00 AM
From: Joe E.  Read Replies (2) of 7841
 
Re your: "Why shouldn't SEG fall to a PE of ~15 resulting in a price of ~$17? Has the market over-reacted to WDC and QNTM? Is the market artifically over-valuing SEG?"

Well, the disk drive companies are characterized by swings up and down in profits. So any one year's 12 month trailing profits might be high or low compared to what investors expect for the future. Seagate is generally thought to have a reasonable potential to earn $2 in an average year, with good prospects to grow in size as the industry grows.

So, SEG is trading around 15 times earnings (well, more like 13 times), but think normalized earnings, not trailing earnings, and it makes more sense.
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