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Technology Stocks : Intel Corporation (INTC)
INTC 40.78+0.7%3:59 PM EST

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To: Doug Fowler who wrote (14212)3/15/1997 7:44:00 AM
From: Jim Garrison   of 186894
 
Doug: IMO the low pe number you are using is too high. I use
the NAIC SSG (stock selection guide), using 5 year history
and my numbers are:

year high pe low pe
1992 18.4 9.4
1993 14.3 8.2
1994 14.0 10.7
1995 19.8 8.0
1996 24.4 8.6
------
average 18.4 9.0 Average 13.7

Look at the low pe numbers! Based on history, IMO there is a
significant probability of a pe of 9, and IMHO a very good
chance of less than 11 - it happened every other year! - judge for
yourself.

Using the hi,low average pe's, and the eps you indicated, gives:
Low High Average
pe's .......... 9.0 18.4 13.7
est est price est price est price
year eps @low pe @high pe @avg pe
1997 $8.25 $74 $152 113
1998 $9.75 88 179 134
1999 $11.50 104 212 158
2000 $13.50 122 248 185

My ssg analysis indicates, for long term purchase, intel
is toward higher end of buy range of 86<Buy<146
with upside/downside of 2.1 and estimated total return of 13.3.

IMHO there is significant downside risk. Particularly with
the competition getting going. That will present
more profitable buying opportunities. Great company, stock
price ahead of itself. (I own at average price of around 60).

My opinion only.

jim garrison
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