Petz
ted, just to interject on two things in your dispute with chic about INTC and CSCO earnings:
First I don't see as a dispute; I was just providing another view point.
[INTEL] What are those factors that have convinced you that they will not continue to make the same gains going forward?
On July 1, 2000, Intel had $4.6B of unrealized gains in their portfolio. That amounts to $0.66 per share of potential future earnings from sale of investments. If you think that number will go up, think again. On April 1 they had $7.8B of unrealized gains, they "took" $2.1B of gains to their bottom line in Q2, but an additional $1.1B of gains just went "poof." (7.8-4.6-2.1 = 1.1)
Basically, they liquidated a quarter of their portfolio and lost another 10% from market declines so their portfolio value dropped from $9.8B to $6.2B in 3 months.
Your numbers imply that Intel's portfolio and its paper gains are fixed numbers. I do not agree. With a fall rally, its very likely that their portfolio will experience a very big gain on paper. In addition what's to prevent them from investing more of their cash into stocks...they had nearly 4 billion at the end of 1999 and I bet since then that number has gone up.
My point in my post to Chic and my point to you is that the situation is very fluid and its very difficult to make the prediction that the '99 gains will not continue. BTW it appears from some of the stocks I have seen in their portfolio, that their portfolio manager is pretty savvy when it comes to stock picking and playing the market.
[CSCO] Yes, I said their margins had slipped quarter to quarter. They are still good margins, so what's your point? Much better than AMD's btw.
They are much worse margins than AMD.
AMD operating earnings before tax = 21.4% of revenues
AMD operating earnings after tax = 17.7% of revenues
CSCO operating earnings (taxes?) = 14.4% of revenues
What's your point?! Any investor who ignores a huge decline in margins when sales are rising is myopic.
First, John, why the aggressiveness? I am not the enemy. In my discussions with Chic, I didn't feel like we were fighting.
Secondly, my source for those numbers indicates different figures than yours. I have the following:
AMD
Pretax oper. margin: 10.4%
Net prof. margin: 9.1%
CSCO
Pretax oper. margin: 22.95%
Net prof. margin: 14.10%
CSCO is selling at 142 time annualized operating earnings. Get out of it while you can.
I am not in it yet. As I said in my post to chic, the stock has not moved for 3-4 mos. due to its high valuation. However, given its growth prospects, its core industries, and its ability to execute well, I expect that when the stock does move, it will move up.
ted |
