SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Nortel Networks (NT)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: ddcox1 who wrote (4850)2/20/2000 7:12:00 PM
From: RetiredNow  Read Replies (1) of 14638
 
Hi David, I agree with most of your points except the last one as it relates to Cisco. A period of rising interest rates does not affect high growth stocks with little to no debt. So Cisco is insulated from the rate increases. However, it will affect companies like Nortel and Lucent who carry a lot of debt.

Also, I think valuation models should change with the new era. I think historically we have looked at PE ratios, and for me they worked very well in identifying good values in the last two decades.

However, I personally feel that the only way to really take a measure of a company now is to look at discounted future operating cash flows. That is why Cisco and Nortel are commanding huge valuations. Nortel still has a lot of work to do in this area though. Their cash flows look real sloppy, whereas Cisco's looks great. My point is that PEs still work for value companies like Kodak, Coke, Xerox, GE, etc. But for tech companies, look at future cash flows. It seems to have a stronger correlation with stock price performance.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News