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Strategies & Market Trends : 50% Gains Investing -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (975)	5/31/1998 8:11:00 AM
From: Dale Baker	Read Replies (1) \| Respond to of 118717

WMB - I finally got around to reading the annual report. Two interesting statements stand out. First, WMB doubled its EPS from 1994 - 1997. What's the president's strategic goal? To double EPS again by 2000. With 1.04 in 1997, he's looking for $2 just 2 1/2 years from today. I think they can execute. So assume a 25 - 30% growth rate in EPS over the next few years. You get about 1.30 in 1998, 1.60 in 1999 and 2.00 or better in 2000. The market should continue to give WMB a PE of 30 based on steady growth in their various businesses. (PE NOTE: WMB had a PE of 20 through most of 1997. In 1998, the market has raised the PE steadily to the current 36. If that holds, the numbers below go to $48 in 1998, $60 in 1999 and $72 in 2000.) Stock price - just do the math. Barring any problems, WMB should hit $40 by the end of this year, $48 in 1999 and $60 in 2000. That's a 50% gain in 18 months and 100% in 24 months. WMB may not be a high flyer, but it's a great sleeper stock - you won't stay up nights worrying where it is headed the next day. The second key statement concerns their fiber optic network development. Their goal is to "turn promise into performance". That means delivering a 7000 mile network on time and on budget "while booking future business to re-establish position as the wholesale network carrier of choice." WMB aims to have telcoms provide 15 - 20 per cent of their total operating profit by 2000. Anybody think they can't do it?