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ending July 31, 1995. Petitioners claim that good appraisal
practice requires use of the same period of time for the
guideline companies and the subject company. We agree with
petitioners that the preferable comparison of historical and/or
projected earnings should be made using consistent time periods.
However, petitioners do not explain how the use of consistent
time periods in the instant case would change Mr. Engstrom’s
conclusions. Although this flaw in Mr. Engstrom’s analysis leads
us to question its persuasiveness, we are not convinced that it
renders his analysis wholly erroneous.
Mr. Engstrom relied solely on HII’s fiscal year 1995
financial information in making his conclusions. Fiscal year
1995 was a “banner year” for HII. It realized sales and net
income exceeding the sales and net income that it realized in
prior years. Petitioners contend that it was in error to rely
solely on the fiscal year 1995 information. Respondent argues
that use of the fiscal year 1995 information alone was justified
because HII was experiencing strong growth, which HII’s
projections indicated would continue, and “it comports with
common sense that more current information and expectations are
more indicative of the value that an investor would place on
stock than are historic earnings.”
We might agree with respondent that the hypothetical buyer
would give primary consideration to the most recent year’s
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