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Technology Stocks : CheckFree (CKFR)
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To: TLindt who wrote (3636)4/28/1998 7:57:00 PM
From: jjs_ynot  Read Replies (1) of 8545
 
TLindt,

I had to step out. I need to clarify what I said earlier. I am a follower of the Growth at a Reasonable Price model for stocks which values P/E at the revenue and earnings growth rate. In today's market, that value model produces numbers like $55 to $60 for DELL and yet it is trading at approx $75. Likewise the S&P 500 is overvalued by about 15 percent based on that approach.

Checkfree is fairly valued based on that approach at today's price. However, if one normalizes to a market multiple of growth rate of 15 to 20 percent you could get 27 to 30 per share today. Thus, 25 seems like reasonable lower limit for price and represents a good value for the dollar, which is hard to find in today's market. I hope I have explained myself a little better.
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