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Technology Stocks : KEMET Corp. -- Ignore unavailable to you. Want to Upgrade?

To: Czechsinthemail who wrote (685)	9/24/2000 5:35:35 PM
From: Czechsinthemail	Respond to of 906

More from Yahoo KEM is way below its historical P/E now If we average out the historical P/E of KEM in the last 5 years by taking its extremely volatile period between September 99 till June 2000 out, KEM has an average between 15 to 22 trailing 12 months P/E. It is a very predictable stock. Whenever it was close to the announcement time, it would tend to be at 22. After the announcement, it would drop back to around 15 because of the new earning replacing the old earning. Therefore I am adding the time value factor (how close it is to the announcement day) to calculate the fair value of KEM at a particular time. I have done the calculation by adding time factor in and find out that KEM, with its current price, is sitting at ttm P/E of 12.94, below its historical average P/E of 15 in the last 5 years. If it is at the average historical P/E, the price of KEM should be at 33.94 today. By mid October, it should be at $36 to maintain the 15 P/E in the last 5 years. I am using only 90 cents earning for the October announcement. If the actual earning is different, we can pro-rate the difference back to the price after the announcement. In the long run, 29 1/2 is a very good price to add to your position. If this P/E channel can be valid for 5 years during the good and bad time of KEM, there is no reason why it cannot hold in a long run. Note: during the extreme volatile time of KEM, the ttm P/E runs as high as 110 which was not sustainable. It had continual correction since January that lasted till July this year for KEM to get back to its historical P/E channel. Most of you who hold KEM for long enough time should realize that KEM is a lot less volatile since end of July. This is due to the fact that KEM gets back into its normal P/E channel. I have established the fair dynamic KEM stock price for it to stay inside its historical P/E channel. If you folks are interested, I will not be reluctant to share with the board here. From the table, I can see why sell off started at 32 1/2 in the week of Sept 11, and why when it reached 33 1/4, it could not move further up. This week, the price may go as high as 34 1/4 and we may see the big fund managers start selling. messages.yahoo.com