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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: hueyone who wrote (32681)	10/1/2000 10:08:26 AM
From: Seeker of Truth	Read Replies (2) \| Respond to of 54805

Like everybody that posts here I oppose a one parameter view of companies. In that context I wonder what people think about the following: Sales/employee. This works out to about $400,000 currently for NTAP, $500,000 for Merck, and about a million for SSTI.(!!!) Some businesses automatically have these high ratios and this parameter can be ignored. For example,oil companies operations are highly automated; employee's salaries are a small % of their expenses, which include huge capital outlays. We can eliminate such companies as being nontech, let alone non-gorilla. But among the gorillas maybe this could add some interesting insight? One factor that could influence this ratio is the extent of outsourcing. This obviously increases the Sales/employee count ratio. But if the outsourcing was less efficient than doing it in house then there should be a reflection in the growth of profits. So we might assume that in comparing two excellent companies that each have optimized their amount of outsourcing. Does anybody have employee counts for various gorillas? Is the ratio important? I suspect that a steady increase in this ratio would reveal the importance of intellectual property and the scaling thereof. Many other parameters are important also, of course.