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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?


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