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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (10181)	4/10/1999 9:43:00 PM
From: Logistics	Read Replies (1) \| Respond to of 41369

Vendit, An AOL excerpt from the following: BANCBOSTON ROBERTSON STEPHENS Keith E. Benjamin, CFA April 11, 1999 AOL COULD BUY ANYTHING BUT HAS SHOWN STRATEGIC DISCRIMINATION, IN OUR VIEW – AOL is the model for the proposed USA Lycos Network and Yahoo! Its $180 billion valuation clearly reflects an appreciation of that position. We are evolving our thinking regarding AOL's options, given the power of its valuation. We would be surprised if it bought a media company like CBS with a less attractive set of growth opportunities when it would seem easy to set up ownership of a joint venture in something like CBS.com, which would allow AOL access to more content suitable for a broadband world without the baggage. We keep wondering about the power of its brand and financial muscle. With all the concern about competition from @Home and cable companies, we note the market capitalization of @Home with Excite is now approximately $30 billion and the market capitalization of the new AT&T/TCI is approximately $200 billion. We suspect we are not thinking broadly enough about AOL's growth paths and potential acquisition targets. It is barely starting to build business services, even after the closing of the Netscape deal. While the math challenge is large, we still expect the company will continue to grow into a surprisingly large valuation. We expect another record quarter in March, with upside to all forward estimates.

To: Vendit™ who wrote (10181)	4/11/1999 9:56:00 AM
From: RocketMan	Read Replies (1) \| Respond to of 41369

Is AOL 40% cheaper than the market?? Here is an interesting quote from Worth magazine I found on the Yahoo thread: interesting staement in Worth..... by: bobtmay (35/M/MA) But is it too late to buy these stocks? Maybe not, although it's tempting to conclude as much after a glance at the price-to-earnings ratios of these stocks. For example, at a recent price of $159, AOL was trading at 167 times next year's anticipated earnings of $0.95 per share. Ridiculous under any circumstances, but especially so considering that the stocks in the Standard & Poor's 500 Stock Index are trading at 23 times next year's earnings. Yet a strong case can be made that AOL is actually cheaper than the market as a whole. (Warning: number crunching ahead.) To see how that could be, investors need to factor in the anticipated earnings growth rate of both AOL and the overall market. The consensus among analysts is that AOL's earnings will grow 47 percent next year, versus a paltry 3.8 percent for the S&P 500. The ratio of AOL's current p/e to its anticipated growth (its "PEG ratio") is 3.5. The market's PEG ratio: 6. Conclusion: AOL is more than 40 percent cheaper than the market. Here is the entire article: worth.com