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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (105561)	6/27/2000 8:14:00 AM
From: Glenn D. Rudolph	Respond to of 164684

Quantitative Strategy Update Morning Call Notes (Bulletin Available) ) High Quality Stocks Inexpensive Even When Using P/E-to-Growth Our theme for the past month or so has been that the Technology bubble has left true high quality stocks historically inexpensive based on P/E and P/CF. Some have suggested that our analysis does not account for the growth opportunities that exist within lower quality (i.e., Technology) stocks. After all, the average five-year projected earnings growth rate for the companies in our B- Index is 17.0%, while the same figure for our A+ Index is only 13.8%. In response, we have written a short report that examines the current P/E-to-Growth Rate of each of our Quality Indices (i.e., A+, A, A-, B+, B, and B-; the data are not really meaningful for our C&D Index). These indices currently comprise more than 1300 companies. Currently, our B- Index sells at 5.1 times its projected five-year earnings growth rate, and our B Index sells at 2.9 times. For comparison, our A+ Index sells at 1.8 times its five-year growth rate. (see chart below) Thus, even when accounting for prospective growth opportunities, true high quality companies appear inexpensive when compared to lower quality ones. (R. Bernstein) Bulletin United States 27 June 2000 Morning Notes Summary Part 2 Merrill Lynch & Co. Global Securities Research & Economics Group Global Fundamental Equity Research Department RC#11217912