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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: Teflon who wrote (3313)	8/4/1999 2:33:00 AM
From: michael r potter	Read Replies (1) \| Respond to of 4467

-OT- discovered a value stock. Amazing, . engs $2.66 sh., total profits $1.9B, sales of $45B, and the stock is only $63.00! And yet, the market cap is still only half of AOL, despite AOL being 1/2 off. This is a trick, as those amazing #s of profits, sales, aren't yearly numbers... they are what GM did last quarter! I have been comparing Internet Capital Group to Georgia Pacific [GP $48]. An apples to oranges comparison? No, more like passion fruit to steak. If ICGE trades at $32, it will have a market cap of 1/2 of GP. GP should earn close to $4.00 this year, and more next. $14B. in sales. Last quarters engs. came in at $1.20 per sh. a 13% positive surprise vs. estimates. GP has been around a long time, has vast timber holdings and produces pulp, paper, and building products. Now I realize companies like GP and GM are at a competitive disadvantage in the"new era" financial marketplace, as they produce products we want and need now, vs. what may someday be needed, and eventually produce a profit for owners, but still...Sometimes the market seems to get it almost backwards when it pays absurd prices for what speculative companies might be doing in five or ten years, when there are very substantial companies that are earning a ton of money now and will be doing the same in 5 or 10 years, and the latter go for a fraction of the price of speculative ones. The value of this is not to slight ICGE or to recommend GM or GP. [GPs 12 mo low was $18, which was at way understated book value and only 4.5X this years engs., where was I?] It is to help keep in perspective the valuations being put on various companies. When valuation differentials get extreme between various groups in the market place, it pays to keep it all in mind when deciding where to put our risk capital, possibly how much one should pay for each, and a glimpse into the real risk being presented. At least it should for those weighing fundamentals as part of the decision making process. Mike