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Re: The fallacy here is that real trailing earnings, if you review their
financial statements closely, are about 4.25 for the past 12 months, a
pe of 30.82(approximately). By July 1, expect these numbers to be about
4.60 and 28.5.
Gene,
How do you reconcile your TTM eps with those of every other source which puts their TTM in the 40's? I have stopped following MSFT once I unloaded my position. TIA for any insight on how you get those #'s.
Re:Growth rates have exceeded these levels forever
They have, but going forward it will be esp. difficult to do so IMO. Until about a year ago, all I used were MSFT products(Encarta, Bookshelf etc) With me on the net, it makes little sense to switch over to one of their programs to get a piece of info. Incidentally, the info on the net will be "fresher." What I am trying to say is that I believe the net could slow down the rate at which MSFT sells their products and lead to serious deflation in the software sector. We are already seeing it with freeware and MSFT's own IE4.0(which I use BTW), which they give away for free. If more serious threats are posed by Corel and IBM in terms of the Office suite, we could see more deflation there too. I've seen growth forecasts for MSFT of 22%. Using my #'s they are trading at twice their growth rate, something I consider very pricey indeed.
BTW, I love the company but not the stock at these levels.
Regards,
Brian |
