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 : PROGRAMMER'S PARADISE (PROG) -- Ignore unavailable to you. Want to Upgrade?

To: Bruce A. Thompson who wrote (384)	1/25/1999 9:42:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 2383

Bruce, I think you might be double-counting something. If PROG earns .30 for the 4th quarter, it would have earned .63 for the year, giving it a trailing p/e ratio of about 22. PROG earned .26 in the 4th quarter of 1997, so the trailing 12 months earnings would increase by only .04 when you replace the .26 of 4th Q 97 with the .30 of 4th Q '98 (assuming they earn .30). The main thing to keep in mind is that PROG's gross margin declined this year due to greater DSO sales. They also increased their SG&A expenses due to the recent acquisitions as well as establishing an internet presence. Therefore, their quarterly earnings this year were lower than quarterly earnings from last year in the 1st 3 quarters. However, with the increasing sales volumes, their profits should increase even with a lower gross margin. Therefore, it is expected that the 4th quarter earnings will exceed last year's 4th quarter earnings of .26. The real question is what is the p/e looking forward. Zeev has projected $1.20 per share of earnings for 1999 and I think that is a reasonable, conservative target. At $1.20 per share of earnings, the forward-looking p/e is about 12.