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Strategies & Market Trends : Due Diligence - How to Investigate a Stock

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To: Don Pueblo who wrote (169)4/18/1999 1:41:00 PM
From: Nazbuster  Read Replies (1) of 752
 
TLC, one issue that has always puzzled me is how to evaluate a company with big losses or debts.

Take a look at the financials for Conexant, for example (CNXT). Big revenue drop, huge loss vs. profit, and the stock goes up. I know much of this is from "forward looking" expectations, but how would an individual investor have any clue about choosing something like this? What motivated the buyers who forced the price up?

Another is LWIN, a wireless company investing huge sums and generating ugly Balance Sheets and P&L as a result. Everyone seems to think LWIN is a big winner because of the future of wireless. Again, how would we ever arrive at LWIN as a positive, safe investment with the financials in their present condition?
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