Hi ABC;
You seem to concentrate on prior stock performance as your
evidence for the stock currently being a bargain. I feel that
this means that you are a momentum investor.
My statement about TI (at these prices) is that it is a momentum
stock, and your statements support my belief very well.
It's not a story stock because DSPs are too small a percentage
of revenues, the growth rate is too small, competition is rising
too quickly, and DSP sales are partly taken from other products
the company makes.
It's not a value stock because it is so high compared to cash,
book value, recent price, growth rate, etc. In 1992, the company
was a value stock, as it was selling for less than 1/2 annual sales,
now it is selling for a multiple of sales 5 times larger. In other
words, sales per share have gone up about 21% since 1992.
But the stock price has gone up by (your figures) 264%. This
is a combination of an unnaturally low price in 1992 and an
unnaturally high price in 1997. Buying in 1992 was a great idea,
in my opinion, and selling in 1997 is also a great idea, in my
opinion.
Sure the stock could go higher, but it could also go a LOT lower.
And you were unable to call the top at 142 1/2, what makes you
think you will call the top if/when the stock returns to a price of
1/2 annual sales?
You are also financially astute enough to extract the DSP sales
data from the quarterly reports. You knew that the DSP growth
story was dead probably within a few hours of the release of that
last earnings report. You could have warned the longs on this
thread that the stock was going to tank, but you didn't. Why
not? Were you busy selling off your holdings? What's your
agenda?
-- Carl |
