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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (5245)	8/24/1999 12:31:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Frankly, (and Franqly :) I'm really surprised there have been so many posts expressing the idea that "something" must be behind this most recent move in the price of Qualcomm's stock. Using traditional metrics as the basis of a valuation, the stock STILL is not over valued (if you agree with my analysis, tee hee.) I'll try to explain. Assume a trailing EPS of $2.05. To arrive at $2.05, use the pro forma EPS in the two most recent quarters. Now divide the current stock price ($184) by $2.05 to get a trailing PE of 90. Assume $5.00 as the EPS for 2001. That's about 40% greater than the FY2000 consensus estimates which I think are too low and will be increased in due time. Using those assumptions, the PE is about two times the estimated, annualized earnings growth. For an established gorilla, that is not undervalued. In the short time I've owned the stock, my thinking is that the stock might be fairly valued for the first time. But definitely not over valued. --Mike Buckley P. S. On that note, I'm going to bed. It might take me a long time to get to sleep. I'm having trouble getting Michael's Mooving cows out of my head. :)