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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Jordan A. Sheridan who wrote (10554)	9/5/1998 2:03:00 PM
From: johnd	Read Replies (1) \| Respond to of 74651

Of course I am long MSFT, even more so after loading up some more recently. I consider MSFT increadibly cheap. A week ago I was worried about the impact of the world markets to MSFT price at 113. I think that is now factored in. From here on, what drives individual stocks will be earnings. With the stronger than expected showing of Windows 98 in Japan and USA, I am quite confidant about MSFT beatinbg the 49c that wall street expecting for this Q. I am now expecting about 52c. That would be a whopping 48% increase from the 36c that MSFT reported an year ago. If you factor in the last year 1Q one time loss and this Q on time gains, the eps will 58c vs 26c or 100% year over year gain. Besides MSFT will have a trailing EPS of about $2.00. Give it a 55 to 60 PE. There you go 110 - 120. If we end up seeing the 68 PE it hit on July 10th again, then we are looking at 136 by end of October. I don't expect a 68 PE soon. But I do see a strong likelihood for 60 PE or around 120 by end of October. Please don't use this for short term trading or option purchaces as no one can predict the short term prices. I am just pointing out likelihoods. johnd