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Technology Stocks : IDTI - an IC Play on Growth Markets
IDTI 48.990.0%Mar 29 5:00 PM EST
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To: 5,17,37,5,101,... who wrote (8242)5/7/1998 5:29:00 PM
From: OldAIMGuy  Read Replies (3) of 11555
 
Hi J. Using the Michael Murphy method of adding to the eps the R&D expense per share, IDTI has about $3.15 per share total. He uses this value in calculating something similar to P/E but in this case it's P/(E+R&D). In IDTI's case it's equal to about 3.5. He says that anything under about 6-7 is undervalued.

MM says that tech stocks, because of their heavy expenses in R&D can't be assessed properly by using P/E. Personally, I like his thinking and in the case of IDTI, it says that their stock is cheaper than NSM or AMD, although all three are relative bargains by his definition.

Best regards, Tom
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