Free Cash Flow as Value Criterion Message Board

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Strategies & Market Trends : Free Cash Flow as Value Criterion

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To: jbe who wrote (33)	10/28/1997 8:04:00 PM
From: Pirah Naman	Read Replies (1) of 253

jbe: I won't comment on the debt issues and the qualitative issues, since they aren't central to the issue here. I propose that for now at least we set aside any discussion of the relative merits of any of these companies. What I am perceiving is that these different sources are calculating things differently. And I think this is where we would all benefit from investigating the differences further, in order to understand this. For example, going by the figures I pulled out of VL, and putting them in your terms, I get the following price to projected (1998)FCE ratios: CSCO 32.65 CPQ 18.87 SUNW 13.66 ELY 17.84 DE 14.06 XRX 15.11 KO 34.04 CA 15.36 AMGN 15.11 TLAB 40.91 SGP 28.11 It seems to me that the discrepancies are so distinct across the board that we should try to figure them out. BTW, in S&P Outlook's August "Buffett Screening" they got the following companies (among others); I include the price/1998 projected FCE ratio based on VL numbers for fun: ADBE 17.31 AMGN 15.11 ELY 17.84 CSCO 32.65 DNEX 16.91 EMC 25.53 INTC 26.98 PMTC 23.14 Any ideas? Pirah

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