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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (50752)2/2/2013 6:15:19 PM
From: Jurgis Bekepuris1 Recommendation  Read Replies (1) of 78468
 
GLW results: Yeah, if your expectations were low, then maybe you were OK with the results. Looking at recent history, GLW earnings are down 14% compared to the crisis year of 2009, which is bad. If you compare against 2010, the earnings are down 50%. 40% down from 2011 The somewhat positive side is that sales went up each year (14% annualized growth) from 2009.

If you look at FCF, they have only 600M FCF in 2012 compared to 1.7B in earnings.

1.25$ per share == 1.85B earnings in 2013 is not impressive. That's still lower than 2009. You could argue that that's 10P/E, but really that's 10P/E on a company that still has earnings lower than in the midst of great recession.

With all the cheering about GLW as great innovative company, its long-term results are not great: finance.yahoo.com^gspc;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
They seem to constantly get into boom-bust products. They benefit from the boom, but don't seem to be able to deal with the busts without losing the earnings/cash/share price accumulated during the boom. It seems that the way to invest into GLW is to buy at beginning of yet another boom cycle and sell as close to the top as possible. The question though becomes if there will be another boom cycle and when.

It's possible that GLW is a typical example of tech company where investing is gambling on new products and people like Buffett would not invest at all
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