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

To: kvkkc1 who wrote (62019)	10/23/2001 1:49:57 PM
From: Charles Tutt	Respond to of 74651

IMHO the price/sales ratio reflects the monopoly margins. If those disappear ... JMHO. Charles Tutt (TM)

To: kvkkc1 who wrote (62019)	10/23/2001 2:08:31 PM
From: Timetobuy	Respond to of 74651

Because it's microsoft! Not only that, whenever an index fund buys, msft gets buyers. What would justify a higher p/s and pe? People looking for a "safe" investment who don't pay attention to valuation. It will perform like other industrials have for the same reason that the other industrials have. Ho hum! Not going out of business. Not going to see the growth rate that it's had in the past. Not going anywhere as a stock for a few years, but probably not going lower either.

To: kvkkc1 who wrote (62019)	10/23/2001 2:10:53 PM
From: DiViT	Read Replies (2) \| Respond to of 74651

There is no cut and dry yea or nay in terms of valuation metrics. Market is what Market does. Even if you boil it down to fetching an attractive P/E relative to a company's historical growth rate, you're out of luck. Microsoft (Nasdaq: MSFT), Johnson & Johnson (NYSE: JNJ), and Pfizer (NYSE: PFE) -- our three Rule Makers in the black -- are all fetching earnings multiples that are more than twice their respective growth rates. What does that mean? fool.com

To: kvkkc1 who wrote (62019)	10/23/2001 2:39:55 PM
From: David Howe	Read Replies (2) \| Respond to of 74651

I feel MSFT will have EPS growth rates of around 10% for the next 5 years. I studied the Dow 30 and found that the average PE was around 22 even though almost none of these companies had any appreciable growth, let alone 10%. I also studied the Dow 30 and found that none of these companies had a balance sheet anywhere comparable to MSFT. Take out the value of MSFT's cash and you have a forward PE of around 25. It's fairly valued in my opinion, even from a long term historical PE metric. Can't compare PS of different companies. MSFT margins are far greater than nearly any company.