Thursday, October 18, 2007

Four pillars of Tech

The four pillars of tech according to Kramer are:

3. GOOG and

Let us look at each of these to see if they offer good bargains at current prices.

1. RIMM carries a P/E of 76, PEG of 1.56, Price to cash flow of 90.

2. AMZN carries a P/E of 124, PEG of 3.54 and price to cash flow of 42.

3. GOOG carries a P/E of 50, PEG of 1.22 and price to cash flow of 46.

4. AAPL carries a P/E 49, PEG of 2 and price to cash flow of 32.

AAPL is the cheapest from the P/E and P/CF point of view. Google is the cheapest by PEG point of view.

From a discounted cash flow point of view, none of the stocks look cheap and each of them look quite expensive. In the long term, the value is likely to catch up with price - this can happen through stagnant or declining share price.

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