Paul,
>Tom, IMO you need to make two adjustments to your calculations:
>First, you need to value the stocks base on the next 4 fiscal periods, >not the coming fiscal year-end. Since we are very near to the end of >this quarter, I suggest you start >with 3Q '97.
I believe we have to deal with the present time frame. FY 97 is one used to put the value at $56, from there you can decide if the stock is over-valued or under-valued
>Second, from all indications, growth is looking up for the networkers. >Cisco said today that it expects growth of 30%-50% for the >networking sector as a whole, and while that is a guestimate, itis >probably more reasonable to use a 40% growth rate. Besides, >valuation of growth stocks is a hip shot anyway.
That's right, it is a hip-shot. I believe there is growth in this industry , but how must I don't know. You have to buy into the belief that networking is still on the rise, which I do.
>The final issues, which have yet to be discussed in detail are the >cost savings that can be realized by the merger (Mory has alluded to >them, but they have not been spelled out in detail), and decent >projections resulting from
>synergies utilizing cross-selling in marketing channels,
Mumbo jumbo. Mory is only trying to hold the chickens in the coup. His job is to sell the company to you.
>Even if the stock is fully valued under your assumed growth rate, you >would expect it to return 35% per annum (not a bad rate of return!), all >other things being equal (as economists love to say)
Right! and that is why we stay with this stock, because we believe that this stock has growth potential.. But once you find its worth..... then you can add to or reduce your exposure to protect your investment.
To answer the other question about Mory selling: this info is listed with the exchange. Individual Investor had Ascend listed as having 12 insiders filing an intent to sell at the transaction price of $63.45. Now if these guys thought ASND was going to $70 or $80 do you think they would have sold? I wonder how much they are buying back now. And isn't it funny how the price went up to $60 and then back down. They keep spoon feeding you great earning and then the stock breaks down and low and behold bad news comes out. You my friends who are small potatoes are the expandable ones.
Tom Hays |
