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Technology Stocks : Compaq

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To: Maxer who wrote (15534)1/29/1998 6:15:00 AM
From: D. Swiss  Read Replies (1) of 97611
 
Max, I wouldn't focus on the PE ratio of Dell. I would focus on the PEG ratio which says right now that if the company earns $4/share next year and is expected to grow at just 50% of the rate it has been growing at (70-75% x 50% = 32%), the PEG ratio would be 24/38 or .76 (a discount to future earnings). If it grows at the same rate as it has in the past (a tremendous stretch), the PEG ratio would be .33 vs. 1.06 for the industry. Anyway you look at it Dell is trading at a nice discount currently.

Best of luck

:o)

Drew
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