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Technology Stocks : Broadband Communications Technologies
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To: John F. Dowd who wrote (25)5/13/1998 3:02:00 PM
From: ftth  Read Replies (1) of 36
 
Hi John, stay tuned...we've only addressed a few points. As far as analyst projections for these companies...they're almost meaningless. Emerging companies in emerging industries cannot be accurately forecast. Even the companies themselves will tell you that in their SEC documents. But analysts need to keep busy, so they fabricate growth figures based on pure speculation (usually unjustified by at least making rational arguments....hype, in other words). Analysts will seldom assign greater than a 50% growth rate to any company, so if you must guess, that might be a good bound on supportable expectations. Arriving at a justifiable answer requires detailed examination from many angles (which is what I will attempt to do).

With these discussions, I'm not trying to quantify the value (or lack thereof) to specific numbers because I think that exercise is meaningless for companies and industries in this category (i.e. emerging). I think the only way to assess such companies is more qualitative, such as ranking all the constraints as either: decisive, strong, marginal, or weak; then determine a net ranking based on all the pieces. The basic question that I'm attempting to answer is: Do these companies have superior capabilities and/or superior positioning within their industry sub-group, and if so, is it sustainable? Posing the same questions for the industry itself is also valuable.

Net rankings of marginal or weak would not be worth committing investment dollars to. We'll have to see how these 2 end up.

dh
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