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Technology Stocks : All About Sun Microsystems

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To: Sonki who wrote (13869)	1/22/1999 6:06:00 AM
From: Byron Xiao	Read Replies (1) of 64865

If you use Peter Lynch's formula to calculate a stock's price, SUNW is not a steal. It's 1999 earning projection: 2.77 (this did not take into account today's 1 penny exceed expectation.) I will give you that they will beat estimate in the next 2 quarters by a penny, since they did that in Q1 and Q2, then we have a 1999 earning projection of 2.80. Its 1998 EPS was 2.29. Using Peter's formula: Stock price = %EPS growth x 100 x EPS = 0.2227 x 100 x 2.80 = 62.36. So at 98, or 96 or whatever SUNW opens today, it's still 50% more expensive than its fair value. Am I am using forward earning estimate, instead of past earning estimate. Dale might know something when he short this stock at 68. Maybe Dale is from the Peter Lynch school of investing and is a "value" investor. So I will give him so slack from now on.

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