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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: KevRupert who wrote (4194)	3/15/2001 2:47:19 AM
From: Mang Cheng	Read Replies (2) \| Respond to of 6784

Ad, In a bear market environment which we are in now, bears had been really quite successful in using a simplistic P/E number approach to attack Palm and drove down its share price. All I want to point out is that a P/E ratio by itself is quite meaningless. Some stocks can go for 3 or 4 P/E but it can still go down lower while stock like Palm which has a triple digit P/E but the stock price still has a great potential to go up. Why ? That's because of the earning growth rate behind the stock. Let's say Palm P/E is 120, it's earning growth rate is 50% per year, its P/E per growth rate (PEG) will be 2.4 Right now the PEG for the S&P500 is 1.5 Is 2.4 too high as compare to 1.5 ? Yes, if Palm growth rate is slowing. No, if Palm growth rate is increasing. Mang P.S. As I am doing these calculations, I am really quite surprise at by how much some of these stocks got their heads smashed in: JDSU, GLW and NT all have their share prices chopped so low that they all have PEG below 1 now. It means that the Street is really quite bearish on the optic and telecom sector.