MSGI. . .Float=5.1 mil . . .Revs rose 61% to 82.2 mil for fiscal year end 6/99.
MSGI provices direct and database marketing, telemarketing and
telefundraising, media planning and buying, online consulting and
commerce, automated Internet marketing and Web design services.
Price to Sales Ratio is 2.85
By contrast to other companies in this sector MMPT=10.73; TFSM=14.11;ADFC=25.99; NETP=39.89; DCLK=45.52; ENGA=112.11 [overvalued due to their 2.9 mil float];
Price to Sales Ratio is important when placing valuation on internet and other high-tech stocks. Since most of these companies have no earnings, we must look to their top line. . .sales revenues, to see whether their price is undervalued or overvalued when compared to other stocks in their immediate sector. . . .in this case, when compared to all other internet advertising/marketing companies, MSGI is very much undervalued.
Double-Click, the bellweather of the sector is valued at a ratio 16 times higher than that of MSGI.
This process can and should be used as one method of valuating every high-tech issue. This is an objective valuation, compared to the usual subjective ones I tend to emphasize. . . but then, I don't readily see the fruits of this company, unlike being able to visit your local mall and compare Abercrombie and Fitch to the Old Navy and Gap stores. So we must rely more on objective valuation.
And once more, this internet advertising/marketing sector is blazing hot at this time. It would not surprise me if we saw 2 more buyouts before the end of the millenium. TFSM? MMPT? NETP? or MSGI?
Place your money down and spin the wheel.
Rande Is |
