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Re: abh3vt post# 4904

Saturday, 02/19/2005 11:48:28 AM

Saturday, February 19, 2005 11:48:28 AM

Post# of 173787
abh3vt.. in PEG ratio use the G of geometric weighted average of growth in the next 5-8 years and not just using the next year growth (like you said if one compan y growth rate next year is 50% they might not grow 50% in the next 5 years hence it's not fair to use 50% as the G in PEG ratio.. for that reason I am always careful interpreting the PEG ratio (espeially if I heard it from other people).

it's useful to use PEG in conjuntion with next year estimte PE and forward 2 years and 3 years forward PE ratio.

also watch the revenue growth.. this will help us to distinguish a one time spike in net income or the net income growth is sustainable.

Stan

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