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Technology Stocks : Flextronics International (FLEX) -- Ignore unavailable to you. Want to Upgrade?

To: 18acastra who wrote (567)	2/24/1998 5:56:00 PM
From: jeffbas	Read Replies (1) \| Respond to of 1422

If the tax holiday will ever end, then it is an asset with a declining value and should be valued as such. Such a company should theoretically have its earnings converted to a fully taxed basis, a somewhat higher than normal p/e applied because of the advantages you mentioned, and an amount added for the present value of the future tax savings. This approach will give a proper progression of the price without a hiccup when the taxes kick in, and will be lower than applying a straight p/e to untaxed, or lightly taxed earnings. I noted that KNT got killed because of its ECM exposure to the semiconductor industry AND computer industry - DELL and CPQ, where the price (and margin) pressure was stated as being severe. I would think some of our favorites are in the same computer boat??