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Technology Stocks : i2 Technologies
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To: Sweet Ol who wrote (2040)9/18/2001 9:06:46 PM
From: notblake  Read Replies (3) of 2339
 
i challenge you to back this statement with examples of industry leaders 'typically' selling for 1-3x sales. even if you can find some isolated instances, we are talking about and investing in PUBLIC companies here. software companies tend to sell for higher p/s ratios than hardware and 'old economy' because of their potential for well above average margins. msft has been cut by 60% and still trades at greater than 11x sales. i can cite many other examples. i2 is not msft; but it is a leader in its industry- an industry that is in its infancy. this is an extreme bear market valuation. doesn't mean it can't go lower (we all know this by now- in evrything tech); but low valuations in software companies like i2 normally bottom in the 3-4x sales area. take into account the cash on i2's balance sheet and.... it looks pretty attractive if you hold your nose, start to average in here and have a 18-24 month horizon. i'm not looking for getting back over 100 (except in fantasies); but a move to the high teens in not out of the question over the time period i discussed. from current levels- i would take that kind of return.

you're piling on and rationalizing lower prices the same way we all tried to rationalize higher prices back when we were making new highs daily. both practices are counter productive to ones wealth accumulation! : ) by the time we hear that business is improving, the stock will not be in single digits.

i would love to hear from anyone who disagrees with me. please include your reason.

nb
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