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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: sandeep who wrote (57348)	4/16/2001 4:15:17 PM
From: werefrog	Read Replies (1) \| Respond to of 74651

"explain the number" I was wondering how you came up with it, thanks for the explanation. Even the web site I posted gave itself a 2 point cush. Since I mostly swing trade I use a 1 month chart & data to figure trading ranges. But even if you buy at 63, if several analyst lower estimates a few minutes after you buy, you would either have to bail out & cut losses or determine if you want to become a bag holder. Darn, I missed calling the close by 3/8, I must be slipping.

To: sandeep who wrote (57348)	4/16/2001 8:32:30 PM
From: K.Ramesh	Read Replies (1) \| Respond to of 74651

Sandeep, I see that you have been doing a lot of research on the stock. Can you clarify your expectations of the new highs ? The current EPS expectations for the company is 1.78 for FY 2001 (06/2001) and 1.96 for FY 2002 (06/2002). Both of them are considered aggresive estimates with MSDW indicating that the company would guide the numbers lower. Even if we go with the existing estimates, the growth rate for 2002 is around 10%. Add some more for their virtual stranglehold on the PC market, their cash position, strong fundamentals etc and we get a PE of around 40. At that forward PE on the $1.96 estimate the stock is worth around $78.00 , which may be reasonable, by the end of the year. At the old highs of around $120 , the forward 2002 PE would be more than 60. All of this is based on the estimates available today which can go down further. Why would the stock hit the old highs anytime soon ? At that PE won't we be back to where all this started, i.e, too much exubarance in the market ? I doubt whether we will ever see such enthusiasm in the market again, anytime soon. Unless, every other stock's PE is at the low end and Microsoft's alone carries a very high PE. A very unlikely scenarion, IMO. Rk