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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Z268 who wrote (7678)	10/25/2000 11:09:24 PM
From: Dave Gore	Respond to of 14638

Yes, what is the proper valuation? I am thinking that a forward PE of 50 for FY2001 is pretty safe for a high growth industry that can grow revs and earnings by 30-50% a year with some certainty. The key is whether I think they can deliver. According to Zacks: NT has a current consensus of 73 cents for FY 2000 ending 12/01. NT has a FY 2001 consensus of 98 cents. Therefore using a PE of 50 for FY 2001 yields a price of about 49. To me that is a "Safe" area to invest today. I would be interested in what others think. I recently bought Lam Research intraday when its PE hit 7. In the semi industry sector that Lam is in, I think that is a very compelling area. I think you really have to form an opinion of what an appropriate valuation is so that you stay on the right course.