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Technology Stocks : All About Sun Microsystems

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To: cfimx who wrote (22705)	11/10/1999 3:34:00 PM
From: jim kelley	Read Replies (3) of 64865

Twister, You are correct the analysis is a bogus hypeing of the stock value. The "free cashflow" should be used in a NPV calculation. This guy is using operating cash flow which greatly overstates the value of the stock. Here is the real data from SUNW 10-K: Operating Income 1,522 M Operating Cashflow 2,516 M Free Cashflow 420 M Check this out: Message 11874320 At 46 times (S&P average) free cash flow, SUNW is only worth $24/share. Note : "Free Cashflow" is "operating cashflow" minus investment cash expended. This is what is required to keep the business going.

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