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Technology Stocks : CheckFree (CKFR) -- Ignore unavailable to you. Want to Upgrade?

To: Brian K Crawford who wrote (891)	12/9/1997 9:36:00 AM
From: Charlie Smith	Read Replies (1) \| Respond to of 8545

[ckfr multiple] Brian: A simple, conservative rule is P/E greater than or equal to EPS growth rate. Assuming a long term growth rate of 30 percent or more, a 30 multiple on $1.00 in earnings for 2001 justifies the current stock price. I use a slightly different model relating P/B to ROE. Higher ongoing ROE deserves a higher P/B multiple. My guess is that CKFR can consistently earn better than 25 percent on equity, making a long term multiple of 7 times book value reasonable. Hope this helps. Charlie