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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Linda Pearson who wrote (4079)	1/27/1999 8:29:00 PM
From: Steve Hufnagle	Respond to of 17183

I am not sure I remember hearing of the NEC deal is this new?

To: Linda Pearson who wrote (4079)	1/27/1999 10:52:00 PM
From: JDN	Read Replies (1) \| Respond to of 17183

Dear Linda: Rings my bell!! JDN

To: Linda Pearson who wrote (4079)	1/28/1999 9:22:00 AM
From: BI*RI	Read Replies (3) \| Respond to of 17183

Was it just me that the opening paragraph annoyed: An Investment Opinion by Louis Corrigan The EMC Effect? It's hard to look at a company trading at 69 times trailing 12-month earnings and say, "What a bargain!" Yet, as Michael Ruettgers, CEO of data storage giant EMC Corp. (NYSE:EMC - news) , suggested in Tuesday morning's conference call, that's what investors perhaps should say. To provide some perspective, Ruettgers offered up some comparison valuations. The average S&P 500 stock trades at an earnings multiple that's 4 times its earnings growth rate. Leading tech names like Cisco (Nasdaq:CSCO -news) , IBM (NYSE:IBM - news) , and SAP (NYSE:SAP - news) trade for over 3 times their earnings growth while Microsoft (Nasdaq:MSFT - news) and Lucent (NYSE:LU - news) trade for more than 2 times their growth rates. Then there's EMC. At $101 13/16, it sells for about 53 times the consensus FY99 earnings estimate of $1.93 per share, a number that assumes a 30% growth rate that should prove conservative. My e-mail reply to Motley Fool: Are you deliberately trying to mislead the reader or confused in your comparisons? When comparing Cisco, IBM, and SAP at 3 times growth, MSFT and LU at 2 times growth, and the S&P 500 at an average of 4 times growth you are talking Price/Growth or PEG. But then "there's EMC. At 101 13/16 it sells for about 53 times the consensus FY99 estimate of 1.93 per share...............a 30% growth rate" Huh? What gives? Why throw the oranges comparison of P/E in with apples PEG. Why didn't you then say that EMC's trading at 3 times growth rate? The novice reader is not going to know to make this conversion of your growth numbers in relation to current price in order to make a fair comparison. Even the seasoned investor is likely to be mislead by your wording. Fortunately, for me, I know that the current P/E of EMC is below CSCO, LU, etc, which is why I bought it instead. The fact that you start the article with 69 times trailing earnings and then go into CSCO, LU, MSFT, and IBM with numbers ranging from 3 to 4, with no reporting of EMC's PEG is either purposefully misleading or just shoddy reporting. Sincerely, Marc Bishop Not a Fool.