Hello Randy,
<< Just curious -- looking at your list of favorite stocks, how high are your hopes for RATL as compared to the others on your list? >>
That's a tough question. Basically, I don't think the RATL story has run its full course yet. I quite agree with GS that RATL relative valuation is still "modest". Also, market demand seems to be going strongly in their favour. I don't put price targets on my stocks. If the story continues to be good, I stay with them. I strongly see that at RATL, I'm very comfortable with them.
Having said all that positive, I could imagine some point at which RATL may run into "market saturation" sooner than let's say a MSFT for example, because their software is tools for professionals, not mainstream stuff that every PC Dummy (me included :-) needs. My guess is that the professional market is not limitless.
The most valuable rather pure software tools co. is arguably ORCL. I know this is a rather crude comparison. ORCL mkt cap now is $228bn vs. RATL at $7+ bn. So RATL still seems not overly valuable. Besides RATL sells at about half ORCL P/E. Again, that compares rather well. As to my above point about saturation, remember ORCL, too, had to reinvent themselves about 2 years ago. Their stock was $25 back then (there could have been a split since, though) - anyway ORCL was no glamour stock at all not too long ago. This could happen to RATL eventually.
So while I have no idea what the ultimate value of RATL will be, I still think it's a lot higher than today.
As for my list of stocks, I do not own each and everyone of those in my personal account. Especially the "old economy" are rather absent. In the accounts I manage for clients, depending on their risk appetite, time horizon, inclination and comfort level, I do include some of those blue chips. If I had all the money - which I do not yet have :-) I would certainly buy these "old" blue chips myself, as these are indeed my favourite ones. But I personally feel safe enough to invest in mostly higher-growth, smaller-cap stocks for myself.
As you can see, many are semiconductor and chips stocks. I do like them all. Besides, I also very much like JNPR and BVSN. CDTS is rather speculative, but could be really interesting. They have good funding and backing, and the market trend is coming their way. The performance of RATL has not been as breathtaking as some of the others, but I care more about the business than the stock price performance. And this is why RATL is definitely a core holding of mine.
I'll be glad to send you and discuss the list of stocks I personally own in a PM. All are from the list in the profile, though. Just send me a list of your stocks :-) as PM.
Sorry to keep you reading for so long,
kind greetings,
Thomas |
