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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Rascal who wrote (33202)	10/24/1999 11:06:00 AM
From: OSHANL	Respond to of 41369

Nice post to read from Yahoo board. Something to remind longs and those who have doubts on AOL. 3 posts in all. messages.yahoo.com AOL Justified--for Bravesuck by: AnnaTheMoi 357374 of 357382 >>>>Ok Now I will refrain from condeming AOL but can some longie out there justify AOL's current valuation with any hard facts? The growth rate of AOL's earnings and it's PE are not in line. Can you explain that?<<<< Bravesuck I'll bite! (The Braves may suck, but you don't AOL, do you? :) OK, here goes--some significant Balance Sheet and Income Statement numbers for you to chomp on. Let's not even count the current quarter. Let's look at 2 years, 1997-1999. I'm not even going to get into the non-numerical fundamentals in this post. LOOK at these facts and please SHOW ME another 'Net, Industry Definer and Leader...that looks--FACTUALLY-- like THIS! B=billion and M=million --Total REVENUES grew from 1.7 B (1997) to 4.7 B (1999) Do you realize what kind of growth that is??? 176% ? --Net INCOME grew from -485 M (1997) to +763 M (1999) (I have no problem with that! :) --FYE 1999, Long Term Debt is 348M *** against a balance sheet of 5,348 (billion.) That's 6% !! Take 6% of your own total net worth and pretend for a moment that's your outstanding debt. Would you be worried...? --A whopping 28% of total assets sits in CASH and Equiv. (Short term investments) 66% of total assets is cash, short and long term investments. Sheesh! Talk about MAN-AGE-MENT! THINK about the numbers I just gave you and THINK about some KEY questions, like... Interest Rate Sensitivity? NOPE! Now, let's take a look at a KEY item on any Income Statement from ANY company. Where does the income from and is it increasing or decreasing? --1997-- Income from Operations: -485 M and Non-Operating Income is +10M. --1999--Income from Operations: +458 M and Non-Operating Income is 638M. What do these numbers say? They say that operating expenses are being SUPERBLY managed despite tremendous, explosive growth; growth that is yielding PROFIT and also that cash and investments are being wisely invested and managed--very wisely. It says lots of other things, to many to mention in a post, but if AOL's Balance Sheet isn't a DIAMOND, I don't know what is! If you're going to invest in a leader, these are the kinds of numbers you dream of... --Explosive Growth in a NEW industry --Well-Managed Expenses despite explosive growth--that has every potential to keep growing --Well-Managed Debt It's all in the Statements. Go back as far as 1992, review the key lines and tell me the P/E ratio makes no sense. Bah! Posted: 10/24/1999 9:40 am EDT as a reply to: Msg 357273 by bravesuck_99 View Replies to this Message messages.yahoo.com I LOVE THIS!! ps. to Bravesuck by: AnnaTheMoi 357377 of 357384 Ahem... Just a little tidbit from the latest Annual Report...more numerical facts to chew on. I wanna help you stop ringing your hands over the P/E ratio... and I quote...page 53, last paragraph: ""Notes Payable (that's debt, Bravesuck) at 6/30/97 totalled 452 million and mainly consisted of a two-year senor secured revolving credit facility. (that's a revolving credit line, Bravesuck) The company had the Credit Facility to support its continuing growth and network expansion. The interest rate WAS 100 basis points above the 'LIBOR' rate (that's a rate lower than prime and typically offered to premium bank customers, Bravesuck) and was paid periodically, but at least quarterly. The Credit Facility was subject to certain financial covenants and is payable in full at the end of the two year term, on July 1, 1999. As of 6/30/99 and 1998, there were no outstanding amounts on the Credit Facility and the Credit Facility WAS TERMINATED June 30, 1999."" I love that paragraph. Posted: 10/24/1999 10:15 am EDT as a reply to: Msg 357375 by wlcooper View Replies to this Message messages.yahoo.com Correction* by: AnnaTheMoi 357378 of 357383 I posted, quoting from the Annual Report: ""Notes Payable (that's debt, Bravesuck) at 6/30/97 totalled 452 million The CORRECT number is $52 million. Shift Key error. Sue me :) Posted: 10/24/1999 10:17 am EDT as a reply to: Msg 357377 by AnnaTheMoi View Replies to this Message