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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Pierre-X who wrote (7800)	11/22/1997 9:21:00 PM
From: Craig Freeman	Read Replies (2) \| Respond to of 11057

Pierre-X, Yahoo research has recently shown a number of analysts moving down to "hold" but lists revised EPS at $2.34 "this year" and $3.12 "next year". It's a long way from $3.12 down to Zacks' $1.50 -- especially for a well-run company with an excellent brand image. Are you short WDC? Are the execs at Zacks? Craig

To: Pierre-X who wrote (7800)	11/23/1997 10:23:00 AM
From: Zakrosian	Read Replies (1) \| Respond to of 11057

Pierre-X - I've greatly appreciated your observations and analysis of the hard drive sector and WDC in particular. Have you looked at the relationship between the PE at which WDC has traded and their projected earnings at the time? It's probably wishful thinking on my part, but is it possible that the higher PE's occur at a time when earnings are declining and the price has dropped because investors assume that at some time the cycle will reverse and earnings will rise? And, conversely, that the lower PE's have been during times of price runups because of the assumption that there will be overproduction in the near future and earnings will be affected negatively? If so, then perhaps now is when investors will value WDC at 20 times earnings, giving a share price in the low 30's.

To: Pierre-X who wrote (7800)	11/23/1997 11:20:00 AM
From: christopher d licata	Read Replies (3) \| Respond to of 11057

the only fault in your logic is that the pe tends to be lower on peak earnings and higher on trough earnings. on 1.50 in earnings the pe should expand to 20 for a price target for me of 30. when earnings hit 2.75-3.00 next year, the pe shoould contract to 15 for a price target of 45. this is still a great company with great products and great management and doesnt deserve to go from 54 to 22 in a few months. hang on, buy more, we will all be rewarded.good luck