To: JakeStraw who wrote (9038 ) 8/23/2001 2:59:19 PM From: Crystal ball Respond to Taking no prisioners, Jake you have to read the Forbes article Sept 3, 2001 page 32 UNINDICTED ANTAGONIST regarding Greenspan. On NTAP's price recovery I won't concede a price at $50 either, I see the GROWTH in STORAGE and the DEMAND for DATA, CONTENT, i.e. STORAGE all around me daily, lets assume (incorrectly) that the price of $12 is a fair price (it's way too low, but lets do the math), On recovery we can expect at least 50% growth or more since storage is growing EVEN IN THIS RECESSION, so $12 is $18, $27, $40.5, $60.75, $91.12, $136.68, $205.03, $307.54, $461.32. Okay. Let's go 80%, $12 is $21.6, $38.88, $69.98, $125.97, $226.74, $408.14, $734.66, $1,322.40, $2,380.31. My point is this, as beaten down as NTAP is at $12 or $12.37 currently its Price to Earnings Ration P/E is 60 to 62, okay, even old fashion 1950s or 1960s smoke stack company P/E of 30 means this is twice the price to earnings GROWTH multiple of that conservative number, So conservatively I would say you need to either double the mid point (5 year) price of $60.75, i.e $121.50 or just take the mid point of $125.97 as your 5 year discount rate, assuming the stock just stops growing after 10 years life term, which it of course will not, which means a higher price should be anticpated than that, assuming that it's P/E stays the same, or that is, that its earnings grow in parallel to its price. The Storage industry expects growth rates larger than this. I think you are looking at 18 months to 2 years to achieve 6 or 7th year prices with the same discounting Growth Rate FV/PV simplified calculation. I suppose I could run the actual rate FV and PV calculations but I would have to go into my spreadsheets to do that.
