Contrasting valuation of SEBL with GE and QCOM makes a
case for buying SEBL before QCOM or especially GE, taking together the degree and probability of growth prospects.
I tend to look at some of the market leaders to figure what the market is willing to pay
I do that too, but only do as to high-growth tech stocks, leaving out GE and other fine companies. I believe investors still pay the multiples they do for GE and others due to long term records of stable earnings growth in much less volatile segments of the economy than software. With all big-cap techs' stock prices volatile in this decline, I am buying/will buy the most volatile ones (such as SEBL) with price declines well exceeding what I take to be any decline in their growth prospects or competitive position.
When the dust settles I want to own companies that dominate market segments with great growth prospects, and beaten down to PEGs no higher than the GEs of the world. SEBL and BEAS may not own their space as QCOM owns its IPR, but neither do they depend upon such uncertain events as QCOM. So I see less risk in SEBL and BEAS, even if more upside may be possible in QCOM.
To each his own about timing. Stocks I've bought recently I've almost all sold covered next-month ITM or barely OTM calls against, having no conviction in the market, wanting to get paid if I'm right that it will decline (and then still owning shares), and believing I'll have more chances if it bounces. I see the odds favoring further Naz decline this year based upon bear market history, charts, sentiment (too many bulls left, etc.).
My ultimate point is that if SEBL continues to execute perfectly I don't expect it to dodge general market malaise, based upon multiples still contracting, so I'll get it cheaper and stronger. If I'm right and it sees 25.5, that gives me almost 40% more shares than if I bought at 35.5. Over the LT that makes a huge difference if SEBL grows as expected.
Appreciate your contributions on G&K, here, elsewhere. Also very jealous of your good fortune with Tiger! |
