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Technology Stocks : Cascade Communications (CSCC)

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To: Andreas Helke who wrote (3363)4/2/1997 6:42:00 AM
From: Robert Scott   of 3743
 
Assuming the insanely undervalued CSCC would mean that fair value is $50, it would take more than 8 years for the earnings of CSCC, compounded at 50% a year, to pay back the 5B acquisition price. 50% a year is highly questionable considering the range most analysts and companies are saying is 30-50% and that's probably over a 3-5 year period. Over a longer period, perhaps 20-30% is more realistic.

Most capital investments require a < 5 year payback.
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