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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Jim Mullens who wrote (31374)	1/19/2003 10:04:58 AM
From: kech	Respond to of 197124

Nice article Jim - showing the linkage between dividend growth model formula and PEG ratios. Most people in finance use the formula for perpuity to value the stub part of the valuation of a project after the immediate growth and cash flows - say first 5 or even 10 years). The perpetuity model of course has strong assumptions about a growth rate that will continue for a long time and so using this means that people often put in very conservative growth rates and high discount rates for this part of the valuation. At least that is how I use it.

To: Jim Mullens who wrote (31374)	1/19/2003 11:31:49 AM
From: Ken S.	Read Replies (1) \| Respond to of 197124

Jim, Re: "Stated another way, the PEG (P/E divided by growth) ratio should be equal to or less than 1.00." Here is a different sell criteria than the PEG =1. I think this would be 1.50 vs. Qualcomm of 1.44. From Kiplinger's site: "He sells a stock when it becomes overvalued. Szczygiel says he'll often begin to sell a stock when its P/E ratio rises to 50% higher than the company's projected earnings-growth rate." Scczygiel's stock picking philosophy is quality at a reasonable price. Ken