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

To: JHP who wrote (45032)	7/31/2001 10:10:14 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

JHP, yahoo says BEAS p/e= 182 AOL says BEAS p/e =184 Zacks says it's 74. I suspect the SEC filings agree. Are you interested in understanding why that's the case? --Mike Buckley

To: JHP who wrote (45032)	7/31/2001 11:29:56 AM
From: tinkershaw	Read Replies (1) \| Respond to of 54805

tink yahoo says BEAS p/e= 182 AOL says BEAS p/e =184 thats today tink. regards john Look, it is quite a simple problem to solve. Simply add up the trailing 4 quarters earnings and divide that into the stock price. And they are as follows $.05, $.07, $.10, $.08 = $.30 $20/.30 = $66, and today's price $22.5/.30 = $75, or more in-line with Zachs. But P/E is really only a ratio with great relevance to slow growing mature companies as the ratio changes so quickly with growth companies. In addition discounted FCF is a much better indicator of value. As such the forward P/E (assuming you can trust any forward P/E these days, but BEAS has yet to warn or change guidance in any way but up this year) has a forward P/E for this year of 45-50. And as I demonstrated in my valuation model (the same sort of model that an investment banker would use to recommend a purchase price for the on-going business) that at a 29% revenue CAGR, BEAS is really worth at least $17 billion or so (+ or - a tad). I've seen similar DCF calculations from at least one other investment bank. So value it the way your comfortable, but the P/E stated on Yahoo! is seldom accurate I have found and not fit for reliance on valuation. Tinker Again, if as some say BEAS is only a royalty play, then as an enabling royalty play, it is too expensive by far because it will head the way of OS/2. But if BEAS is in the first couple of innings of a gorilla game, and it looks that way to these eyes, but still early, then BEAS looks somewhat cheap here, to mine eyes that is. Then again, as Paul on the Fool has stated, a royalty platform OS game? It just doesn't seem to make much intuitive sense. But we shall have to see as we watch ths market progress in real-time.