3. I am extremely worried about the increasing divergence, between pro forma and GAAP earnings. The pro forma numbers sweep under the rug, the fact that 2 full years of profits from their chipsets and royalties, have evaporated due to failed investments in risky startups. This is a pattern, not a "one-time-only" event. How long is this going to go on?
Ya, but don't forget the investment gains. I think Nextwave will bring in 600 million..
plus, does it really matter? cash and stock has grown from less than 1 billion to over 2 billion. That's what matters. This is real money that can be given out to the shareholders.
4. the only reason the stock is up, IMO, is that the rising market tide is lifting all boats, even leaky ones. Once again, just as during the January and April rallies, investors are pricing in a sharp rebound in the fundamentals 6 months out. Maybe they are right this time (although their track record is not encouraging). Hard to imagine a real Bear Market bottom happening with the S&P 500 PE at 30.
Ya, but the ROIC for the S&P is higher today (or was) than in the past. So doesn't that mean the S&P deserves a higher P/e ratio..? |
