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

To: Bruce Brown who wrote (34331)	11/4/2000 12:00:47 AM
From: tekboy	Respond to of 54805

then again, she could just read that ITWO Hunt Report... oops, no she can't... tekboy/Ares@LyreLyrepantsonfire.com

To: Bruce Brown who wrote (34331)	11/4/2000 9:11:09 AM
From: Bruce Brown	Read Replies (1) \| Respond to of 54805

I wanted to put up some of the quarterly numbers from the Silverbacks and a couple of Kings to see how they look. I don't want to steal Mike's front office game thunder, so I'll leave 'his' company out of it. However, I will take a look at Intel, Microsoft, EMC and JDS Uniphase (Cisco once it's out next week and NTAP when she spouts). As most of you know, I use a Motley Fool measuring stick for the Silverbacks to check the health of the fundamental business called Rule Maker analysis. It's more than just the number crunching, but that's all I'll stick to in this post as the rest isn't really relevant for our purposes. Intel's Q3 • Revenues = $8.731 B • Revenue growth = 19.1% y/y and 5% sequential • Gross Margin = 63.9% • Net Margin = 25.7% • Cash-to-Debt = 14.81 • Cash = $13 B • Foolish Fool Flow Ratio = .92 From the year ago quarter, that was an improvement across the board. GM was up from 58.7% in Q3 '99. NM was up from 22.9% in Q3 '99. Cash increased 20.5% from Q3 in '99. Flow ratio improved from .97 in Q3 '99. This is not a company going off the cliff. The underlying health is stout. What kind of company performs well in a variety of economic environments? I think Intel can weather the storm with $13 Billion in cash. They've got a little cash on hand and if you take a look at AMD's numbers, they are worth comparing. What the heck? Why not take a little peek at AMD's numbers as well? AMD's Q3 • Revenues = $1.2 B • Revenue growth = 82% y/y and 3% sequential • Gross Margin = 47.1% • Net Margin = 18.1% • Cash-to-Debt = .95 • Cash = -$63 M • Foolish Fool Flow Ratio = 1.23 Microsoft's Q1 • Revenues = $5.8 B • Revenue growth = 7.7% y/y and 0% sequential • Gross Margin = 85.2% • Net Margin = 38% or pro forma 32.1% • Cash-to-Debt = No debt • Cash = $24.7 B • Foolish Fool Flow Ratio = .72 Can they weather an economic slowdown with $24.7 Billion in cash? EMC's Q3 • Revenues = $2.28 B • Revenue growth = 34% y/y and 6% sequential • Gross Margin = 57.7% • Net Margin = 20.1% • Cash-to-Debt = No debt • Cash = $2.7 B • Foolish Fool Flow Ratio = 1.61 JDS Uniphase's Q3 • Revenues = $786.5 M • Revenue growth = 171% y/y • Gross Margin = 51% • Net Margin = 22.5% • Cash-to-Debt = no debt • Cash = $1.14 B • Foolish Fool Flow Ratio = 1.72 Bonus Project Network Company Yahoo!'s Q3 • Revenues = $295.5 M • Revenue growth = 89.6% y/y and 9% sequential • Gross Margin = 83.2% • Net Margin = 27.4% • Cash-to-Debt = no debt • Cash = $1.6 B • Foolish Fool Flow Ratio = .26 • Cash King Margin = 51%

To: Bruce Brown who wrote (34331)	11/4/2000 1:20:16 PM
From: mtnlady	Read Replies (2) \| Respond to of 54805

Thanks Bruce - excellent post. Q: Did you ever write your gorilla report on ITWO? That would give me a huge jump start for sure. (heck scratch notes, white paper, back of napkin notes? <g>) "Finally, study the application solutions of ebusiness to see the threat to ERP and who the vendors are that are leading this sea change." Yes.. this is what I really like about ITWO. At least from what I know of them. Not only has their recent acquisition crowned them as a gorilla (my opinion only mind you) but I believe they will (are) replacing more traditional ERP vendors. In my 'simplistic' way of thinking I see SEBL being the 'front end' to b2b e-commerce. ITWO being the 'back end' and ARBA and CMRC being the trading exchanges and specialized apps. Your thoughts? p.s. What a monster if ITWO and SEBL ever 'formally' joined. That idea has been shot down by TD (trader Dave - one of the most knowledgeable SEBL folks on SI) as he believes Tom's ego would never allow a 'sharing of power'. Building a huge value chain and some very special and close relationships (e.g. IBM) - yes - merging. No. Not as long as Tom is at the helm. I would tend to agree... Unless Tom was the one buying out ITWO that is..