Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: JWest0926 who wrote (475)	8/23/2001 6:03:58 PM
From: BWAC	Read Replies (1) of 36161

JWest, What do you value the vast physical assets of those companies at? Not the earnings, the assets? (Which of course must produce some sort of return on assets to justify the capitalization.) Just using PE leaves a lot to question. And granted they are probably still somewhat overvalued. But take GE for example, they generated $26.8 Billion of EBITDA. And an ROE of 27.65%. And pays a Dividend that stands at $1.57%. Does that make it worth $400 Billion? Not to me. But given the huge amounts of cash GE generates and can generate maybe it is. 10 years of the current EBITDA invested back into the business, into new businesses ,or returned to the shareholder certainly adds up. SBC generated $20 Billion EBITDA to go with a $140 Billion market cap.

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