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Pastimes : Home on the range where the buffalo roam -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (2823)	7/3/2000 9:01:56 PM
From: Walkingshadow	Respond to of 13572

I suppose that depends on how you measure "worth." If you measure worth by book value, then CRA is worth about $1.1 billion. It's current market cap is about 4.5 times book. If you measure worth by earnings, well CRA is not profitable at this point. If you measure worth by revenues, then CRA is now trading at 148 times sales. There are other "valuation" methods, none of which are very relevant or accurate for companies in curvilinear or exponential growth phases. But, particularly with growth companies, the market tends to measure worth according to its estimate of future earnings, which may frequently be significantly discordant from present earnings. The market tends to be much less interested in today's earnings, and much more interested in how those earnings might change over the next year or two. IMHO, In the final analysis a company is worth what the market says it is worth. Period. That, and only that, determines the price you can buy and sell the stock at. There is no law that says this must be rational at all, and it frequently probably is not particularly rational, and changes all the time. Anyone who insists that the market valuation adhere to his or her own, and that it must be rational, and buys and sells stocks accordingly-----well, I'm afraid they are in for many disappointments, missed profits, locked in losses, and dead money. Everyone is entitled to their opinion, and free to express it of course. However, it sounds like you are neither a potential buyer or seller, nor do you have a long or short position in CRA. If this is true, then your "valuation" of Celera is irrelevant, since you are outside the market, and thus entirely outside the valuation mechanism. Cheers, Walkingshadow