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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Andrew Danielson who wrote (21530)	12/31/1998 11:49:00 AM
From: rhet0ric	Read Replies (2) \| Respond to of 213177

I've put together a boxmaker comparison chart. This chart includes two columns, growth and PEG (price earnings versus growth) that, I think, are more accurate gauges of comparison than simple PEs. Growth is calculated as trailing year earnings versus two year earnings. In most cases "two years" is actually a fraction of two years, so that's taken into account. I believe one-time purchases and sales (e.g. Apple sale of ARM stake, Compaq purchase of DEC) are also accounted for. Name Price Last yr 2-yrs Bkwd PE Fwd PE Growth PEG Apple $40.25 $1.89 $2.96 21.30 13.60 25.15 0.85 Compaq $42.31 $0.53 $1.76 79.83 24.04 161.21 0.50 Dell $74.00 $0.95 $1.46 77.89 50.68 41.03 1.90 Gateway $51.50 $1.96 $2.77 26.28 18.59 31.88 0.82 Basically PEGs should equal 1. That means that the multiple assigned to a stock matches its expected growth. According to Motley Fool, PEGs of .5 are good buy targets, and PEGs over 1.5 are good short targets. As expected, Dell is assigned a multiple out of line with its expected growth. The stock is overbought. But unless Apple blows away its numbers and gets upgraded by analysts, it's not as much of a bargain as people on this thread have been saying. A lot will depend on just how good iMac sales were, obviously; I agree with Andrew that AAPL's price in the last few months has been largely based on differing forecasts/reports of those sales. In short: AAPL's price action has been rational according to fundamentals. rhet0ric