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Strategies & Market Trends : The New Economy and its Winners

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To: Elroy who wrote (26579)	12/12/2005 3:01:43 PM
From: Lizzie Tudor	Read Replies (4) of 57684

This isn't about OVTI, I'm sure OVTI is a fine investment but those are niche companies that have a place in one's portfolio but not the same kind of investment as GOOG. GOOG is trading at about 40x next years earnings, which are on the low side (analysts are lowballing) by maybe 20%, and these earnings include stock options which analysts don't really look at. Does OVTI deduct stock options from earnings? Anyway the other net companies like yahoo trade at 52x next years earnings, yahoo DOES NOT expense stock options, and yahoo is growing about half as fast as GOOG. It is not a stretch at all to see GOOGs market cap above msft, after all the market size is larger, gross margins are larger, growth rate is higher, etc. Price to SALES and Market cap are not ways to value the "expensiveness" of a company. You need to look at earnings, thats all that matters. PS is used as a way to justify earningless companies.

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