WCOM Message Board - Msg: 17601075

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Technology Stocks : WCOM

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To: Paul Berggren who started this subject	6/13/2002 9:06:18 PM
From: BEEF JERKEY	Read Replies (3) of 11568

Will WCOM hit $500 million Free Cash Flow This Quarter? Seems that as soon as it becomes accepted that WCOM can consistently generate ~ $500 million per q free cash flow the attitude towards the stock price "should" change dramatically. At this free cash flow level the maturing bonds become a non-issue as paying them off as they come due just becomes a matter of course. Any cash flow levels above $500 million should remove any "doubt" and maybe give the stock price a bit of a premium. Previous guidance was for $250 million Free cash for this current quarter. Right off the bat you can add $71 million to that number from the MCI dividend. They said capex would be cut 1 billion THIS year. Since they have already spent $1.25 billion of a $3.5 billion $ budget that leaves capex expenditures of $2.25 bil. /3 per quarter rest of the year or $750 million per quarter capex. There for WCOM should spend $ 333 million less on capex this quarter than previously budgeted. After tax that leaves $199 million to add to the $250 million and $71 million to get a total of $520 million Free cash for this (June 30) quarter! $2 billion per year free cash, which I have shown above is easily doable, gives WCOM $.66 /share, per year profit. If given even the very modest PE of 8 the price for WCOM stock is $5.28 per share!!! Thats 318% higher than the current price! If "the neighborhood" generates growth and larger profits $10 a share should be easily reached within 12 - 18 months at some point. So I figure $9.99 is my target price. I think this realistic because its based on very modest price to sales, price to book and price to earnings multiples. The real key to higher stock price is putting the Bankruptcy BS to bed once and for all. $500 million per Q Free cash Flow does that as it handles the maturing debt - end of story! The only remaining question is whether it becomes apparent immediately to the markets or it takes a while. Every time I go over the numbers I just can't believe what a bargain WCOM is. To call it "speculative" is totally erroneous IMO. We've seen the bottom of WCOM already. It took total BK/Enron panic, the boot from the S&P and 680 million shares traded in one day (the record) to knock the price down to $1.08 - that price simply isn't coming back - no matter what the Markets as a whole do. Will be listening closely to the meeting tomorrow!

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