How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 474.74

-0.8%

3:59 PM EST

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To: John F. Dowd who wrote (71785)	7/29/2002 12:48:07 AM
From: David Howe	Read Replies (1) of 74651

Funny, this is the same thing we've said on this board. Price to Cash flow will be a more important metric, especially if options are expensed. Here's what this guys says. He's right on the money. << In fiscal 2002 just ended on 6/30, MSFT generated $14.5 billion in postiive operating cash flow. The price to cash flow ratio would be about 12. I can already tell you based on the above that MSFT is trading at a significant discount to the S&P based on the DCF analysis. And believe me, when companies have to begin expensing options, every savvy investor (i.e. fund managers & pro's) will use DCF to value companies and not GAAP earnings. >>

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