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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (12835)	12/31/1997 2:52:00 PM
From: craig crawford	Read Replies (1) \| Respond to of 45548

<< The PE I pulled out of the air. I have not recently looked at earnings estimates since the dust settled after last earnings. How is that for being honest?? I ought to look<G> >> I think COMS is forecast to earn somewhere around a $1.08 for 1998 and a $1.98 for 1999. A price of 15 for COMS on $1.08 gives them a PE of 13.8 A price of 15 for COMS on $1.98 gives them a PE of 7.6 Of course I don't think the market will award a PE of 7.6 to COMS anytime soon but 13-14 is possible. Of course most people are looking out to 1999 earnings on this company since they are already in the '98 year fiscally so people aren't making valuation judgements on the $1.08 number. They are looking at the $1.98 number. COMS is trading at 18 times 1999 estimates. I think that is more than fair considering 1997 was a disaster and '98 looks to be a slow year with growth in the 20% range for networkers. Maybe COMS consolidates and doesn't drop much further but I don't see a huge upside. I see no reason to grant COMS a PE of more than 20-25. If you give COMS a PE of 25 on 1999 earnings you get $49.5. I guess that's where some of COMS supporters are coming up with a $50 dollar price target. My contention is COMS might earn a $1.08 for fiscal '98 but won't earn $2 for '99.

To: Glenn D. Rudolph who wrote (12835)	12/31/1997 5:12:00 PM
From: chirodoc	Read Replies (1) \| Respond to of 45548

<<<<They likely mention COMS because the average person has heard of them. ......i think that they also are planning for the cable business to heat up after the cable stocks big rise and bill gates big interest. ..........they know that coms can take a chunk of the cable modem business while also doing well in the networking side. .

To: Glenn D. Rudolph who wrote (12835)	12/31/1997 7:00:00 PM
From: john dodson	Read Replies (1) \| Respond to of 45548

Just this a.m. on CNBC, two motley fool dudes were on and recommended (in addition to IOM) the networking sector. They specifically mentioned COMS and ASND, since both have been beaten up pretty good. After the close, someone asked the guest analyst about 3COM, and he said something like "CSCO is the networker to own. Then after that you may want to own COMS, although 3COM is not cheap at these levels." Interesting COMS was 80 a year ago, but at $35, it's all of a sudden not cheap. -John Dodson