re TXN's P/S:
I have a 5-year P/S range for TXN of 1.2-14.8. I'd assume the 1.2 happened in 10/98. That data comes from Baseline Reports, which is no longer available as their offices were in the WTC.
The problem with using historical ranges for TXN, is that the company has changed a lot. They got out of commodity markets, like selling their memory chips fabs to Micron in 1998. They are no longer a conglomerate; now they are focussed on DSPs. The 2000 earnings were enhanced by the sale of Micron stock in the 2nd quarter, giving a EPS that quarter of 0.75, a level that won't be regained till 2008 or so.
I have to agree that P/S for TXN and other techs, at the September 2001 trough, didn't reach anything close to what I'd expect at a true capitulation bottom. But, in my 6 years of investing, the only time that had the same smell and feel of 9/01, was 10/98. The outflows from stock mutual funds indicated a high level of fear, both times.
A better comparison would be valuations of companies that are doing the same thing they were in 1998 and 1996. AMAT, for instance, had a trough P/S of 0.9 in 1996, 2.2 in 1998, and 2.6 in 9/01. |
