CABLE DESIGN TECHNOLOGIES (CDT) Message Board

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Technology Stocks : CABLE DESIGN TECHNOLOGIES (CDT)

CDT 1.835

+9.2%

3:59 PM EST

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To: Ann Corrigan who wrote (47)	8/28/1998 2:18:00 PM
From: Kyle Klatka	Read Replies (1) of 107

A couple of ideas: CDT is undervalued. It currently is trading at a PE of ~11. If it does in fact fit into the telecom equipment sector then it should deserve a PE of ~24. Why? Other companies in the group trade at PEs around the mid-30s. If CDT has a slightly lower 5 year growth rate then I calculate that a fair PE is around 24. This means, based on next year's estimates (which haven't changed in the last 90 days- granted that only a few analysts follow the stock) the stock should trade around $42/share by mid 1999. Or... CDT's core business is not similar to others in the Telecom equipment sector and it therefore requires a different analytical strategy. Or.... CDT will miss this quarter's and next quarter's earnings targets. Or... Merrill Lynch assumes the latter 2 (with a confirmation from CDT)has sold their holdings, and is laughing at my first suggestion. Just something to chew on. Any comments?

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