Captain,
You were talking about a buyout at $32. Now that we're almost there, you're talking about a buyout at $40. When we're at $40, you'll probably still be calling for a buyout. There's a lot more value in 3COM than the numbers you're after.
Look at this company's balance sheet and its prospects, for goodness sake! If 3COM had maintained its ugly inventories, or even settled for looser ones, its earnings would have been much higher these past two years, and the stock priced accordingly, because everybody has focused on earnings to the exclusion of all else - much tighter inventories, an exploding cash position, fresh new products in (small but) growing areas, and more.
The fact is that after the USR dd gaff, management bit the bullet and turned the company into a lean cash generating machine. The cost of this turnaround was a protracted earnings dip.
No, COMS isn't CSCO, but it doesn't have to be to offer better potential returns over the next couple of years. COMS too has tremendous cash generating power. And momentum is on 3COM's (and EB's) side.
The Internet is only just beginning...
Andre |
