HMK-Is this a buying opportunity? Message Board

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Non-Tech : HMK-Is this a buying opportunity?

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To: kendall harmon who wrote ()	1/28/1999 8:35:00 PM
From: kendall harmon	of 66

On the issue of valuation: Assuming that management has given realistic guidance here, and there isn't any reason to believe they haven't, we see a worst case YOY growth (Dec/Dec) of 6% (0.35 to 0.37). Best case we see qtrly growth of 20% (0.35 to 0.42). Clearly a slowdown in the business from the last quarter annual rates, but why? On a forward p/e basis, this company is priced at ~17x $1.30 earnings. I have to think the growth of the company remains at about 30% (normalized), so we're trading at a PEG of about 0.56, which is attractive in my view, assuming revenue growth isn't slipping dramatically. Even if revenue growth slows to 20%, I would guess there is still a lot of fat to cut out of the corporate structure from recent acquisitions that should keep earnings growing above that rate, say 30% again. Give the company a peg rate of 0.75 and you've got a p/e of 22.5 and a price of $29 on forward earnings of $1.30...all very conservative estimates. minerva07 on the yahoo thread

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