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Technology Stocks : Motorola (MOT)
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To: David Su who wrote (932)4/6/1998 8:05:00 PM
From: Perry G.  Read Replies (3) of 3436
 
Motorola's FAIR PRICE:

1st Q.... .23
2nd Q... .23 or below
3rd Q last year.... .54 (which includes add back of .10 share special charge)
4th Q last year.... .65 (which includes add back of .12 share special charge)

Est 1998 $ 1.65

$ 1.65 multipled by approximate current P/E of 30 = $ 49.5

Now if the 3rd and 4th Quarters are under last year earnings, which from Motorola's statements seems almost inevitable...you can see how MOT is going down BIG...

For example....if the 3rd and 4th Quarters of 1998 come in 20% lower...that means you would have .23 plus .23 plus .43 plus .52 for an estimated 1998 of $1.41...and if you multiple that by a 30 P/E you get a stock price of $42 and change....

Further, what justifies a P/E of 30 when MOT is basically in a tailspin....2nd Quarter current First Call mean estimate is .43 which is already 31% under the Actual 97 2nd Quarter of .62....If MOT's forward looking statements are true, then MOT's own estimate of the 2nd Quarter 98 is going to be .23 or below...that means it would be 63% under Acutal 97 2nd Quarter....THIS IS NOT A GOOD SITUATION

If the 7AM conference call is sufficiently scary...you could see this stock open down 10% or more..

My prediction is that this stock will trade in the mid 40's in a matter of days...
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