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Author: DBazell Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 15  
Subject: earnings, growth, etc Date: 7/26/1998 1:19 PM
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I have a question about calculating p/e. I look at the numbers of DRTK and I have the following:

price 11 1/4, estimated earnings .56 (FY 98) .83 (FY 99). Estimated growth rate 31.67. Current p/e 32.0.

Ok. If I take FY98 earnings estimates and divide that into the price I get

11.25/.56 = 20

So my estimated p/e based on next years earnings (estimated) is less than the estimated growth rate of 31-32%. Does this suggest the stock is under valued? Of course, the current p/e of 32 is the same as the growth rate, and this p/e is based on trailing earnings.

DRTK seems to be winning contracts right and left. They are getting awards for various aspects of their business. They look great from that point of view. I want to decide if I should hold on to my shares since they have been pretty flat lately.

Can someone help me understand my calculations?

Thanks

Dave
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Author: duratek Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9 of 15
Subject: Re: earnings, growth, etc Date: 8/8/1998 3:10 PM
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If you calculate, based on todays price of $8.5 per share for DRTK and your estimate of '99 earnings is about .83/share, then DRTK is selling at 7.225 x 1999 estmated earnings!!

If you add to that the rececntly announced buyback of up to 2 milion shares by the board of directors, I would certainly say that this stock should be $15-20 just based on projected 1999 earnings. It seems that DRTK is grossly undervalued and mostly misunderstood. The recent 40% stock swoon signallled another buying oportunity to purchase at a substantial discount, a masterfully well run company and a company that is in line to haul down additional decommissioning contracts in the near future.

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