AS - you said:
"LOR - you're not including the second largest satellite fleet in the world valued alone at about $12 a share. Subtract debts from that = $9. Takeover bait for whomever wants to dominate sat-com business. LOR needs a deep-pockets buyer and is ridiculously cheap now. "
Book value is Book Value - and Cash is Cash. Thats what your initial thesis was premised on. Now after I shot it down, you have revised to to include fuzzy math on some valuation of their satellites and on takeover considerations. Those satellites ARE on their books and included in their Book value I reported. If you believe they are worth more - then they are only worth more to a buyer. So, in essence you are saying now - buy LOR on the chance someone buys it - which differs from your earlier position. I will agree - they need a deep pockets buyer - or as I showed, at their burn rate - they will be out of cash this year. But I won't gamble buying a company on some hope that someone will buy them out
"All dot-bombs with lotsa cash need to generate business but have substantially lowered burn rates. ESHR and SCNT likely to remain fairly cash neutral. Like most, waiting for business to pick up. SCNT especially will be a survivor. Its cash also makes it a takeover target. Dot-bombs without lotsa cash may go under. "
Now how do you know SCNT and ESHR have lowered their burn rates? Their is no hard evidence of it - so you are simply assuming they have. Sorry, but I wouldn't invest my money based on that. As far as SCNT being a survivor and takeover target - dot-com consultants are a dime a dozen. And who is their market these days? I would not count on a takeover of them - too many issues in trying to integrate consulting firms. Their only assets are their people. And many of the good folks walk when their options go south, or when they are acquired and the corporate culture changes. Just look at MarchFirst (formerly Whittman Hart and some other consultants in the same space). Maybe SCNT will survive - but that chance doesn't make them a good investment.
"VZ - both GTE and BEL were trading around 25 PE prior to the merger, which was successful. VZ business not hit by the internet crash. VZ not a LD company at all like WCOM either. No exposure there but wants to get into that market cheaply and can now force little internet access companies out of business and gradually dominate. VZ wireless and DSL still growing at a nice clip. Wireless phones are not going away. In position to dominate these markets and end up one of the 2-3 goliaths of the info superhighway. "
VZ - Unlike the others - as I noted this may be a bit of a value - however, that doesn't mean it will outperform other investments. I would much rather put my money elsewhere. VZ is trying to get into LD - which will IMO will be a drag upon them. As far as their DSL - IT SUCKS !!!! Ask the majority of their users. the only reason people use it is if they are the only option. Go to www.dslreports.com and see what real users think of them. And wireless growth is slowing and prices coming down. A year ago - I payed VZ /WCOM over $60 a month for my POTS and LD and paid AOL $22 a month for ISP service. Now I pay Sprint $30 a month for wireless service - which includes free long distance, pay my ISP $39 for DSL and pay VZ $10 a month for POTS. How does VZ win under this scenario?
So, while VZ may be a bit of a value - I don't expect them to get back to their bubble years 25 p/e. Best you can expect IMO is back to historical 14 - 16 p/e levels - and IMO thats a stretch.
"WCOM is another story, loaded with debt and LD but that's priced in. Also has tremendous world-wide assets worthy of attracting merger/takeover partners. A global network which screams to be taken over."
Again, LD is a commodity - and in essence you are betting on some type of acquisition. that said, I could see WCOM moving from the $15 / $16 level up to $20 - $21 again later this year - but not sure what timeframe that will occur in. So if thats all you are looking for, it could happen. But I wouldn't bet on takeover hopes to help it here. |
