Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: SargeK who wrote (39618)	3/12/1999 9:38:00 AM
From: SargeK	Read Replies (2) of 95453

The Golden Rule One simple and excellent rule of thumb is that a stock's P/E shouldn't far exceed its projected earnings growth rate. If the ratio of P/E to growth rate (the "PEG ratio") is two or less, the projected P/E five years forward, will always be in the mid-teens or less. But if the ratio is three or higher, the five-year projected P/E will be in the mid-20s -- the stock will still be expensive five years forward, even if it meets expectations. osxstocks.com (Scroll down to the 800 day chart). Projected Earnings Growth (5 year) for the S&P500 is only 7.2% and the current P/E is 28.9. In marked contrast to the Index, UFAB (@8) is selling at 5.92 (ttm/$1.35) P/E and a P/E of 4.1 on projected earnings of $1.95 for FY/00 beginning Apr 1, 1999 and the Projected Earnings Growth (5 year) is 34.3%. biz.yahoo.com Question. Which is the safer bet at this juncture? For Zhang: If you were shorting the S&P500, it would be a helluva lot more logical than shorting in the Oil Service Sector at this juncture. Higher energy costs and an ensuing up tick in inflation will not bode well for the index. K

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