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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: paul e thomas who wrote (11824)	6/3/1998 7:55:00 AM
From: paul e thomas	Read Replies (2) \| Respond to of 13949

RELATIVE VALUATIONS OF Y2K SERVICE COMPANIES There are 40 IT service companies detailled on 'STOCKSHEET' on the internet. The list includes 10 Y2K service companies discussed frequently on this thread.Now that all of the Y2K service companies have dropped a lot in price it is interesting to compare the valuations. If you compare the current price earnings with the growth rate forecasted for 1999 versus 1998 you will find 8 of the 9 stocks I studied(did not study CMND)are bunched within a rather narrow range of .8-1.2. The one stock well outside this range is SYNT at 2.3. This suggests relative to peers SYNT is overvalued . This has been also reported by some analyst.The stocks with the lowest forecasted 1999 earnings growth rate appear to be relatively undervalued(TSK,CHRZ,REGI) while KEA prices have held up the best.When compared with the entire 40 stocks in the group on the basis of a PEG based on 98 earnings growth the 9 Y2K stocks are bunched together when ranked on the basis of PEG. It appears Y2K stocks have only slightly higher than average peg values. In other words non Y2K service companies are also beat up at least as much on a fundamentals basis. SMALL COMFORT. THE KEY THING I LEARNED IS WATCH SYNT IT MAY HAVE MUCH DOWNSIDE STILL