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 : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Sigmund who wrote (6232)	6/21/1998 9:53:00 PM
From: Bleeker	Read Replies (1) \| Respond to of 14266

Sigmund, I have shared with you all of the information I have. But even with -6 cents earnings after the acquisition, THQ's trailing P/E would be 14.7 right now and I can definitely live with that in front of Q3 and just 2 months before the start of Q4. I do think P/E (current and forward) is a very useful measure of valuation, especially when put in a historic context. In the case of THQ, a P/E of 13.5 is near the low end of its P/E range in the past three years. During the past 6 months, THQ's P/E has been as high as 30. That gives me an indication that THQ has discounted a level of risk for me to continue buying in the next three weeks. If the risk premium shrunk too quickly it would not give me an opportunity to buy the stock in front of Q2, Q3 and Q4 at a P/E around 13.5. It helps me tremendously to look at P/E in a historic context. It's also useful to know what benchmark the analyst community is using for the industry average. A P/E average of 22 is conservative, whether or not one decides to assign the higher P/E multiples (as they should) to the companies with negative earnings on Vic's list. Not that the list is all inclusive but it's a good representative sample. There is an article in the new Economist on the interactive software industry (P.70) It is a bullish piece on the industry. It argues that the interactive entertainment software sector is now the main catalyst or PC sales. Here is an interesting excerpt: more than 30 million Americans, most of them married, buy at least 3 PC games a year. Also, 14% of households with no children now have a game console, an all-time record. Lastly, it looks like the G-7 meeting propped up the yen a bit and that Hashimoto will offer an S&L bailout style plan for Japan before Bastille Day. I still think the global markets will rally on (our) Monday. Bleeker