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Strategies & Market Trends : Classic TA Workplace

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To: Shack who started this subject	4/9/2003 10:54:20 AM
From: jjstingray	Read Replies (2) of 209892

Good post from Iblayz on Marketswing. My sentiments exactly with the internet sector. Is JPmorgan really this stupid. This is criminal. I have never owned EBAY and have no intentions of owning it. But here's the deal. At current prices the issue trades at 105.41 times earnings and 21.53 times sales per Yahoo. The company has essentailly no debt (good) and $3.85/share in cash. But we're in an environment when p/e's are a concern when compared to historical norms. And here's a company whose price to SALES multiple is higher than historical price to earnings multiples. In other words EBAY could (if possible) maintain it's current revenue base, return 100% of revenues (not earnings mind you-but revenues) for TEN YEARS and still only pay back half of it's shareholders. Why am I saying this. Here from an AM call.... 07:16 ET JP Morgan initiates coverage of Internet sector JP Morgan initiates coverage of the Internet sector, saying that the current weak economic climate presents a near-term challenge to all Internet co's. Firm rates EBAY and USAI Overweight based on solid long-term growth, diversified sales, and attractive valuations; rates YHOO a Neutral given a new growth cycle but a premium valuation; rates AMZN Underweight given low rev growth and margins, high exposure to potential consumer slowdown, and premium valuation; and rates OVER Underweight based on concerns of affiliate losses and increased traffic acquisition costs. Amazing.....we have learned nothing after a boom-bust debacle. JP Morgan tells investors to maintain an overweight position in this company because of ATTRACTIVE VALUATIONS. WHAT-SAY THAT AGAIN! Where is the risk reward in that? One major glitch in EBAY's model or performance and that stock gets killed and I mean killed. I have maintained that because of the amount of pension money and investment capital chasing the market that this period would end up being the period that re-defined p/e's. In other words we would not reach the historical norm of single digit p/e's before finding a bottom. But I have to admit that moronic calls like this make me wonder that we may have to do that to return sanity to one and all.

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