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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (2316)	3/19/2002 2:17:02 PM
From: Sun Tzu	Read Replies (2) \| Respond to of 95531

My starting point when it comes to valuation is the historical Operating margin (say the average over the past 5 years) multiplied by the historical sales growth and divided by the current PSR. If you were to chart this ratio for SOX (or its components) you should have a good normalized valuation metric. As for the sales growth being an important factor for the hot stocks of the 90s, that is no secret. But nor is it something to bet the future on. The MPT factors change over time based on the mood of market participants. Sometimes it is the sales growth, other times it is the earnings, in harder times it seems to be cash flow and financial strength. Yet in other times it becomes the market cap (along with few other factors). The bottom line being that unless you want to subscribe the (very good and very pricey) MPT Review newsletter, you have to run your own quantitative analysis to keep up with the changing market condition. ST