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Technology Stocks : VISIO Corp (VSIO): Big ISO 9000 Play

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To: Robert G. Harrell who wrote (235)10/30/1998 8:58:00 PM
From: Grommit  Read Replies (1) of 522
 
On the tax rate... The low tax rate is a temporary increase in EPS. It distorts the growth rate and the earnings stream.

I have seen analysts pull out the cash flow from an unusually low tax rate and calculate the NetPresentValue of the tax saving (NOLs). They then project the EPS with a proforma normal tax rate. Then add the NPV of the NOLs to the pro-forma valuation. (Deutsche Morgan does this with Cooper Labs for example - COO, and the method is mentioned in COO's annual report. I have never owned COO, btw, but have been tempted recently.)

R Harrell
OT -- No on the FAF, but doing well on SCI, CDWC short term. Longer term F is my best. I avoid financials because I understand them less than oils. My sell of VSIO is probably contrary trade to what will happen to the stock price in the short run. But I still say the the stock is fairly priced at $25-$30. PS - don't be a jerk.
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