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Non-Tech : Borders Group (BGP) -- Ignore unavailable to you. Want to Upgrade?

To: Satellite Mike who wrote (229)	3/9/1999 11:48:00 AM
From: The Philosopher	Read Replies (1) \| Respond to of 411

They're generating about 50X as much income as AMZN. And about infinitely times as much profit <g> Our investment club (which recently bought BGP) did a look at AMZN, just for fun. Their sales now are $640 mil. Suppose in 5 years they go 10 times that, to 6.4 bil. Suppose they do after tax profit of 15%, which they won't -- profits then of 960 mil. Present shares out about 135 mil; therefore EPS of $7. Suppose a P/E of 40. That gives a price of $284, less than double the current price in 5 years, which you can get off a garden variety growth stock with actual earnings. And that assumes a) they can multiply sales 10x in five years, b) can get after tax 15%, which they won't, c) that they will get a high P/E, which they might well, and, most important, d) that they can finance all this growth with NO additional shares issued. Me, I'm happy with BGP. And I keep wondering when it's time to short AMZN.