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Technology Stocks : Gateway (GTW)

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To: Brian Lempel who wrote (206)11/11/1996 12:47:00 PM
From: Meghan Richards   of 8002
 
Gateway undervalued?

Well one way to value a company like Gateway is to figure out
at what price it's P/E ratio equals it's anticipated EPS growth
rate. The P/E ratio by itself is meaningless. The question
should be, does the current EPS growth rate support the current
P/E ratio?

Using this technique (with numbers obtained from First Call)I
came up with a fair market value of $78 1/3.

Another method to value a stock price is based on it's
anticipated long term growth rate. Using this method I came up
with $77.

My conclusion ... at this level (54ish), GATE is significantly
undervalued.
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