You know what if find unbelievable Tom, when RFMD was at its high in March (around 90$) the PE
was at 225X current earning , here's the chart
iqc.go2net.com
Now look at analysts recommendation around March
10/3/00 RF Micro Devices Reiterated 'Strong Buy' at Prudential Volpe - Bloomberg
9/18/00 RF Micro Devices Reiterated 'Strong Buy' at First Union - Bloomberg
9/14/00 RF Micro Devices Reiterated 'Strong Buy' at CSFB - Bloomberg
8/24/00 RF Micro Devices Reiterated 'Buy' at PaineWebber - Bloomberg
7/31/00 RF Micro Devices Rated New 'Buy' at Wit SoundView - Bloomberg
7/31/00 RF Micro Device initiated at Wit SoundView with a Buy - Briefing.com
7/19/00 RF Micro Devices Reiterated 'Buy' at PaineWebber - Bloomberg
7/7/00 RF Micro Devices Reiterated 'Buy' at PaineWebber - Bloomberg
6/16/00 RF Micro Devices Raised to 'Buy' at PaineWebber - Bloomberg
6/16/00 RF Micro Devices upgraded from Attractive to Buy at PaineWebber - Briefing.com
6/2/00 RF Micro Devices Reiterated 'Strong Buy' at CSFB - Bloomberg
4/19/00 RF Micro Devices upgraded from Buy to Strong Buy at First Union Sec - Briefing.com
4/19/00 RF Micro Devices Raised to 'Strong Buy' at First Union - Bloomberg
4/19/00 RF Micro Devices Reiterated 'Strong Buy' at CSFB - Bloomberg
4/19/00 RF Micro Devices Reiterated 'Attractive' at PaineWebber - Bloomberg
4/19/00 RF Micro Devices Reiterated 'Strong Buy' at U.S. Bancorp Piper - Bloomberg
4/19/00 RF Micro Devices Reiterated 'Strong Buy' at Prudential Volpe - Bloomberg
4/13/00 RF Micro Devices Reiterated 'Strong Buy' at CSFB - Bloomberg
5/05/00 RF Micro Devices upgraded from Accumulate to Strong Buy at Prudential - Briefing.com
3/7/00 RF Micro Devices upgraded from Buy to Strong Buy at USB Piper Jaffray - Briefing.com
3/7/00 RF Micro Devices Raised to 'Strong Buy' at U.S. Bancorp Piper - Bloomberg
Tomorrow they will probably downgrade RFMD, makes you wonder if investors should sell because of the downgrade when they should have sold when they were upgrading ??????
One day, when people stop following analysts recommendation (and their estimate) and look at the numbers themselves maybe then the market will make sense. People put too much value on analysts estimate, it's a way for them to control companies, and as nothing to do with valuation, valuation
should be made on available information and management guidance, not analyst guidance.
I'm rally happy about the new disclosure rules, and think people CAN make their own decision , and also think that majors brokerage houses are not happy about it.
If you just look at RFMD growth rate
5 years growth rate of sales 179%
3 years growth rate of sales 115%
1 years growth rate of sales 89%
Look like simple math to me, when your one year growth rate is smaller that your 5 years growth rate that means the company is slowing isn't it. When your growth rate is slowing and the PE increase it's time to get out, why were they upgrading it ????. JMO
PS: Nothing against RFMD, i could have picked dozen of others, but since they just released their earning i thought it would make a good example.
Marc.
PS: i know you are wondering..............here it is:
AHAA
5 years growth rate of sales 18%
3 years growth rate of sales 29 %
1 years growth rate of sales 46%
It is accelerating, less risky in a normal market!!! |
