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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: porcupine --''''> who wrote (31)3/5/1998 2:06:00 AM
From: Berney  Read Replies (1) of 1722
 
Porc,

It seems that each of our goals is to create the "Margin of Safety".
We each choose a different manner to accomplish this objective. As
you know, I utilize a 15 point scoring system. One of the factors is
whether the TTM PE ratio is less than the projected growth rate of
EPS. I will be the first to concede that I believe the DJIA stocks
are unique in that the Return on Equity is more important than the PE
ratio. However, let's look at how the PE of the DJIA compared to
their EPS projected growth rates:

EPS PROJ
SYMBOL PE GROWTH RATIO

GM 8.0 7.8 1.0
MO 16.9 15.6 1.1
CAT 12.5 10.2 1.2
S 17.7 14.4 1.2
UK 10.3 7.9 1.3
AA 15.7 11.6 1.4
MMM 16.9 12.1 1.4
UTX 21.2 14.8 1.4
ALD 21.1 14.3 1.5
HWP 22.8 15.3 1.5
TRV 21.9 14.6 1.5
AXP 21.7 13.8 1.6
IBM 17.4 10.8 1.6
JPM 16.7 9.5 1.8
MCD 23.8 13.0 1.8
CHV 16.1 8.3 1.9
GT 19.3 9.2 2.1
DIS 39.0 17.5 2.2
WMT 29.7 13.2 2.3
JNJ 31.3 13.8 2.3
MRK 34.1 14.3 2.4
KO 41.8 17.3 2.4
GE 31.6 13.0 2.4
T 21.5 8.6 2.5
PG 32.8 12.9 2.5
DD 29.5 11.3 2.6
XON 18.9 6.9 2.7
EK NM 10.5 NM
IP NM 6.6 NM
BA NM 18.0 NM

But then, the next few days could radically change these ratios.

Berney
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