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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: Charlie Smith who wrote (2558)	12/17/1997 10:32:00 PM
From: Larry Brew	Read Replies (2) \| Respond to of 6180

Charlie, Robert, << TI earnings >> I did some quick research since we're on a roll. Periodically I log earning estimates, P/E's, P/s's, growth and numereous other indicators on about 25 stocks, TI included. I try to update monthly or so. Looking at my Oct.4th evaluation, TI 1998 expected earnings was $5.76/share. Today it's at $2.76/share for 1998. With the stock now at about $44/share and split the 5.76 becomes $2.88/share. Only a .12 decrease, but today's tech sector expects better than forcasted earnings due to past performance. Current 1997 earnings are projected to be 2.08 with 4th qtr at .60. At 1997 earnings and a healthy PE of 20, that makes TI a 41.6 dollar stock. Almost all tech sectors, including semis, have given disappointing earnings. This alone will drive multiples to a more normal valuation of 17 times earnings. This puts TI at 35.36 for 1997 earnings and 48.96 for 1998. Remember, sentiment rules and today it's negitive for technology. Personally I believe the slowdown is due to transition in the industry. Some upside should occur in Jan/Feb due solely to added 401k money to the market. Fear not if your a long term investor. No charge for this service! Larry

To: Charlie Smith who wrote (2558)	12/18/1997 8:15:00 PM
From: Larry Brew	Respond to of 6180

Charlie, << I see you're a portfolio manager >> Based on 4th qtr expectations of .60, Zacks' estimates of 2.07 for 1997 fall short. I read 2.17. From this I get the following at $44/share and a 1997 valuation thereof: PE = 21.6 PS = 1.44 PB = 1.85 PCash flow = 8.8 Is this in line with your numbers? I also extract 97 revenues to be 9.8b slightly down from 1996 of 9.9b. With current 98 numbers I come up with revenues for 1998 at 12.5b, assuming the same profit margin. Larry