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

To: Knight who wrote (35713)	11/30/2000 12:09:23 PM
From: Tom Chwojko-Frank	Respond to of 54805

I believe, but I am not certain, that Yahoo's numbers include a large one time gain. The p/e is actually quite a bit more than 11. But its been awhile since I checked. Tom CF

To: Knight who wrote (35713)	11/30/2000 12:29:12 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

Knight and everyone, READ MY LIPS: Don't use Yahoo! to determine PE ratios. That's because Yahoo! doesn't exclude one-time gains and charges. There are probably many websites that provide EPS that excludes those one-time items, but the one I can assure you that does that is Zachs at quicken.excite.com You'll need to go through the simple calculation of adding the quarterly data for EPS and dividing the stock price by that sum, but getting the PE right is critically important. Knight, Using the method described above, I calculated SNDK's PE at 39.42 using a stock price of $41. The PEG based on next year's earning estimate of $1.53 is 1.09. That PEG is unusually low for the typical stocks we follow in this folder. Investors need to decide if it's low for a good reason or if it reflects a market inefficiency that values the company too low. Also bear in mind that a PEG based on an earnings estimate going forward only 5 quarters, as is the current case, is more risky than a PEG based on estimates that are 7 to 8 quarters forward. SanDisk's PE ratio and resulting PEG ratios based on Yahoo!'s data feed are great examples of why it's critical that we not use data feeds that fail to exclude one-time accounting events. A couple of quarters ago SNDK had an extraordinary item, a non-recurring gain that is not due to its daily operations. Failing to exclude those one-time, extraordinary earnings results in a PE and PEG that can decieve and mislead an investor. --Mike Buckley