re: "What P/E do you think the market will award LXK given that the last three quarterly earnings growth rates have been 35%, 32%, and 72%? Currently the P/E stands at 24.4."
Boy, that's a tough question. I personally feel it has a lot to do with the Charisma of the stock. The Internet companies (AOL, Yahoo, etc.), DELL, Lucent and some others seem to demand outrageous PE's. I don't think that LXK fits into these categories (and actually that is fine with me -- what goes up fast, comes down fast).
My personal opinion is that as long as we have a raging bull market, we could reasonably expect 25 to 30 for a PE ratio. It does appear that LXK has now been discovered! I bought it as a long term growth situation, and still feel good about that. We will undoubtedly have some minor glitches, but as long as the company keeps performing, I don't see an end. |
