Larry, thanks for the info. Consider this:
quote.yahoo.com
A similar 5 year chart shows MSFT and ORCL and about the same 5 year growth result as well.
So, we have ORCL, SUNW, and MSFT all up about the same amount over the past 5 years.
I started thinking along these lines when I noticed SUNW is now about 1/10 the market cap of MSFT. The question is, is a 1/10 the market cap of MSFT:
1) Reasonable, or is MSFT overvalued still relative to SUNW. MSFT is still adding about 1 billion a month in cash profit.
2) Since ORCL, SUNW, and MSFT are all still up nearly 500% in five years, one has to wonder if there is more downside (if for nothing else the idea of regression to the mean, something I don't buy into 100% but which I have found useful) After all, a near 500% return over 5 years still kicks the tail out of average stock returns over that period.
3) Interestingly, CSCO is up "only" around 300% over the past 5 years. So, have SUNW, MSFT, and ORCL now reached a fair value, or will they decline more to match up with CSCO??
I mention these 4 stocks because they are fasinating to consider as a basket. They are also the four that come to mind when most people think tech. If all four lost 50% from current levels, we would still be looking at 200% average gains over 5 years.
One last thing, it would be interesting to see Revenue and earnings for all 4 companies 5 years ago vs. today. Anyone know a good website I can use to get that information? |
