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Technology Stocks : Safeguard Scientifics SFE

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To: wellab1 who wrote (2718)	4/28/1999 2:01:00 PM
From: wellab1	Read Replies (1) of 4467

SFE's P/E why textbook rules don't apply to SFE ? Normal valuation in terms of P/E is 2X future earnings growth. That's why drugs are selling off (P/E +3X future earnings growth) SFE earnings growth in next 3-5 years is estimated at 21.25% so healthy valuation should be P/E 42.5 (about 50%more than now) If we will take 99 estimates (EPS 0.63) versus 98 (loss 0.46 EPS) the earnings growth is hundreds of %%% (99% earnings surprise Q/Q) Seems investors are acting on other variables than this one.At least for now but sooner or later this factor should hit home. There is of course a fear of Internet bubble bursting. But right now SFE is just internet wannabe .At P/E 26 there is no bubble to burst(show me Internet co.with P/E 26).If SFE would inflate to only 1/2 of CMGI valuation(P/E 50-60) then we could start to worry. Their holdings in terms of money invested I guess are at least 60% non Internet so far. Do I got it wrong or there is something else going on with this stock?. wellab

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