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Technology Stocks : Dell Technologies Inc.
DELL 120.60+1.8%Jan 9 9:30 AM EST
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To: J. D. Main who wrote (85084)12/13/1998 9:01:00 AM
From: TechMkt  Read Replies (1) of 176387
 
Great article J.D. Here is an important excert for all to read.

Fez
___________________________________________

...Dell Computer, for instance, based on consensus 1999 earnings estimates, has a mountain-high P/E of 44, whereas Compaq Computer's P/E is a sea-level 20. Even taking into account Dell's higher expected-earnings growth rate and Compaq's challenges with smoothly integrating its acquisition of Digital Equipment, Dell still looks expensive compared with Compaq. But the bottom half of Dell's P/E is based on the company's own earnings guidance, and over the past three years the company's actual earnings have averaged 63% higher than that guidance. If that pattern persists next year, that means Dell's real 1999 P/E is 27 instead of 44. Compaq, on the other hand, has a guidance bias of negative 20%, giving it an implied P/E of 24 instead of 20. Kwatinetz believes the bias of both companies will moderate this year. Even so, Dell still seems less expensive and Compaq more so.

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