Morrow Snowboards (MRRW) Message Board

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Non-Tech : Morrow Snowboards (MRRW)

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To: Qualopec who wrote (33)	2/7/1998 1:44:00 PM
From: Qualopec	Read Replies (1) of 56

MRRW undervalued at current levels These calculations use data from Yahoo! Finance MRRW is forecast to earn 13 cents per share in FY 1998. That puts its current P/E (as of 2/6/98) at 29.32. Sounds high, right? But consider the old rule that P/E should equal growth rate for a stock to be fairly valued. MRRW is forecast to lose 17 cents/share in FY 1997; because it's not profitable, calculating a standard growth rate is impossible. But let's assume MRRW was profitable in FY 1997 by spreading its last two (profitable) quarters over all of 1997. MRRW earned 8 cents last quarter and is forecast to earn 5 this quarter. 8 + 5 = 13. 13 / 2 = 6.5. The growth rate for MRRW from 6.5 cents/share in 1997 to 13 in 1998 is 100%. At a P/E of 100, MRRW would be priced at 6.5 on trailing earnings, or 13 on forward earnings. Either way, it looks good. Hang on, everybody! Justin

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