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Technology Stocks : THQ,Inc. (THQI)
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To: vc21 who wrote (6207)6/20/1998 3:48:00 PM
From: Quad Sevens  Read Replies (1) of 14266
 
Vic: Bleeker is right. You seem to be assigning a PE of zero to companies with negative earnings. That makes no sense. In fact, it's the opposite of what should be done. Think of it this way: These companies would be doing better if they had, say, .05 EPS, which would make their PEs outrageously high.

Here's a way to compute the industry wide PE: For a corporation, PE equals total market cap divided by total yearly net income. Let's treat all of the corporations you listed as one giant corporation. The PE for this mega-entity would then be, naturally, its market cap divided by its income. So we just add up all the market caps and divide that figure by the sum of all the yearly profits* (both positive and negative) to arrive at the desired PE. Do you have these figures handy?

Wade

*Operating earnings would be best here. True one-time charges should not be counted, including the GameFX charges for THQ.
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