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Technology Stocks : How high will Microsoft fly?
MSFT 491.13+1.2%12:47 PM EST
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To: Reginald Middleton who wrote (8522)6/18/1998 4:59:00 PM
From: Wizard  Read Replies (1) of 74651
 
>>The point that I was trying to get across was that the EPS number as reported (which is actualy more complex than change in earnings due to the dilutive effects of securities, share buybacks, etc.) have less of a relationship with market value on the date of reporting, (lagged by one day in some cases) than seems to be commonly held.

I realize you said "Please don't read too much into the gross numbers" but I want to clarify a little bit.

ok, so your analysis indicates that a quarterly earnings figure does not correlate well with the market value of the company on the date of release. I haven't seen the data so I can't know but are you implicitly saying that the relationship of a stock to its earnings (the P/E - although based on 1 quarter rather than forward or trailing 12 months) has a less consistent relationship as cap/sales, cap/book, adjcap/cashflow etc...?

(I realize the differences in reported EPS and fully-taxed, diluted EPS but assume that isn't an issue for the moment).

>>one could say the moral of the story is to judge each company on its individual performance patterns and avoid the use of a single macro-measure as a proxy for market value.

I agree wholeheartedly.
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