Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Check Point Software (CHKP) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (2703)	5/28/1998 8:23:00 AM
From: Grantcw	Respond to of 7150

Mark, Your thinking is correct with the valuation of AXNT vs. CHKPF, but here's what I think the problem is. Leaders of the sector generally demand higher P/E ratios because, along with other things, they are perceived to be less risky investments. CHKPF is the leader in the network security sector based on market cap and many articles. The problem is that AXNT's EPS are much lower than CHKPF's even though their share prices are the same. This means that AXNT's P/E ratio is a decent amount higher than CHKPF's, when it should be the other way around. This is one of the signs that CHKPF is undervalued. Grant

To: Mark Oliver who wrote (2703)	5/28/1998 8:25:00 AM
From: Wright Sullivan	Respond to of 7150

Mark- Your statements are all correct, but I don't think Mr. Xu is as far off base as you think. It is absolutely fine to compare share prices and ignore market cap if you are comparing earnings PER SHARE. EPS takes market cap out of the equation. Mr. Xu is entirely correct--your $26 share of CHKPF earns about twice as much as your $26 share of AXNT. We are trying to buy earnings, and buying CHKPF accomplishes this much better than AXNT. This is also pretty basic stuff. Glad to see you and others haven't given up on this board, which has been very useful to me (at times). Kind Regards -Wright