Zulu-tek, Inc. (ZULU) Message Board

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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU)

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To: Bob Bennett who wrote (1898)	2/26/1998 3:25:00 PM
From: John Hanzl	Read Replies (1) of 18444

Bob - Please don't take this the wrong way - but I hope you live someplace warm cause you'r going to loose the shirt off your back! What drives a stock up? For one thing - supply & demand. (Short supply, high demand) For another - the price of a stock sorta gets set by the Earnings Per Share (EPS). The more shares out there, the LOWER EPS. Right? So a stock trades at some multiple of the EPS. This multiple is known as the Price to Earnings Ratio (PE) The larger the PE the more faith people have in the growth of a company. So you want to sort of guess what a given company (say XYZ) should be trading at when they release true financials. For sake of argument lets say XYZ is currently trading at, say, $0.60/share. Now lets use a sort of average PE of 20, we will call this the multiplier (M). (Note: this is not the actual PE for our company, just a sort of rough average of MANY stocks. You would need the actual price of the stock and the EPS to calculate a REAL RE) If XYZ releases an EPS of $0.10 / share then a fair value of the stock would be M x EPS or $2.00. So the stock SHOULD shoot up rather nicely from $0.60 to $2.00 in rather little time. There are many other factors involved - but you DON'T want too many shares out there to reduce EPS and saturate the market. OK? Good Luck! JohnnyH PS - if you want to get on my DAMN newsletter, send me an e-mail

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