Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: sam who wrote (99966)	4/24/2000 5:20:00 PM
From: manny t	Respond to of 108040

NITE,an analysis from the NITE thread: To: jacksoo who started this subject From: Sir Francis Drake Monday, Apr 24, 2000 4:48 PM ET Reply # of 7963 Sad how not all "financials/brokerages" are equal in this market. OLBs continue to underperform relative to more established brokers and financials. MER, LEH, BSC, JPM all gained. Pretty much all OLBs (SWS excepted) are down. AXP (which has a brokerage business) had earnings where they beat first call by 2 cents and year on year growth was from $1.26 per diluted share to $1.46. What is the reaction to such earnings? Stock goes up by 7 points or 5%. Stock p/e is comfortably in the mid 20's. Meanwhile NITE, which is not even an OLB, has earnings of $2.23 for the last 4 quarters, bringing current p/e to 15. What is the reaction to NITE's spectacular earnings? Yes, sell off. Question: with NITE's phenomenal rate of growth in earnings, why is the p/e shrinking? Is a dollar from NITE less green than a dollar from AXP? I guess NITE must have poor prospects for growth compared to AXP. AXP has been growing abroad for decades, and NITE is just starting - hmmmmm, seems to me NITE's growth opportunities must be greater. AXP market cap sits at $66.5 bln, while NITE is at $4.1 bln. Whose cap will have an easier time growing, if we agree that investment dollars sloshing thruogh the market are limited? Color me stupid, but I'd say the market is mispricing one or both of these securities, at least relative to each other. On the postive side - NITE didn't drop all that much today. With a current p/e of 15, just how much lower can NITE fall? Wonders never cease. Morgan