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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: MMW who wrote (137586)	7/24/1999 10:59:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

MMW, I don't calculate the absolute value of a stock. Instead, I prefer to calculate the value relative to the overall market. This gives me a number that is normalized simultaneously for growth and market conditions. Here's how I do it: I take the YPEG of the stock in question (YPEG is the price to consensus year ahead earnings ratio divided by the estimated five year growth rate) and divide that by the YPEG for the S&P500. I then multiply that number by the beta for the stock. If the resulting number is below 1.00 I interpret that to mean that the price of the stock is undervalued relative to the overall market. Similarly, a ratio of more than 1.00 means that the stock is overpriced relative to the overall market. All data can be found in Yahoo! under research. The last time I performed this analysis on Dell (several months ago) Dell had a ratio of around .7 I evaluate the cash flow for every company in which I invest. A major red flag is raised if the company's operating profits substantially exceed its operating cash flow. A second red flag is raised if the taxes paid is considerably smaller than the provision for income taxes, because this may signal overly aggressive accounting tactics. There is much more involved in cash flow analysis, but this should give you some flavor for the kinds of things I look at. TTFN, CTC