Techreports asked:
Oh, ya..how can i find out how much companies like INTC and MSFT or CSCO were doing in revenue in 1995 and what their market caps were? I would like to compare those companies to today's stocks. I do know that INTC grew EPS at 42% from 1985 to 1999!
Of course, you cannot compare the maturity of a company like Intel or Microsoft in 1995 with some of the young companies you listed in your post. Many of them had not even had their business plan scratched out on the back of a napkin in 1995 let alone had formed as a company yet.
Regardless, I save all of my annual reports for study and do have the reports for Intel, Microsoft and Cisco for the years 1995 to present. It's very easy to do what you are asking. I could do it for you in a snap, but I'm going to hand the ball off to you because it's worth knowing how to do. If you want to have the hard copies of the annual reports, you need to call Investor Relations of each of those companies and request the annual reports for 1995. Everything you need is listed in the annual reports in terms of the end of the fiscal year and each quarter of that fiscal year (outstanding shares, share price, market cap, EPS, etc...), so you wouldn't really need to do much 'research' outside of glancing through the reports and running an easy calculation of P/E using the end of each quarter's share price. If you need the EPS for 1994, you can obtain that information on the Internet (Company IR pages, Zack's, Fool, Silicon Investor, Quicken, Yahoo!, etc...).
The much easier and quicker way - if you are happy viewing that and obtaining that information on the Internet, I'll detail Intel for you and get you started on Cisco and Microsoft - is to go to Investor Relations and tap into the annual reports such as this:
Intel's Annual Reports for 1995, 1996, 1997, 1998, 1999
intel.com
Historical Financial Statements
intel.com
Current Fundamentals of Intel
corporate-ir.net
Dividend history between 1995 to date
chart.yahoo.com
Cisco's Annual Reports for 1997, 1998, 1999 and 2000
cisco.com
(Dig around in the historical information for earlier reports.)
Microsoft's Annual Reports for 1986 to 2000
microsoft.com
What i'm also wondering is what kind of PE and PEG did INTC, CSCO, and MSFT have in 1994 and 1995? Were they lower than today's future gorillas?
Keep in mind that Intel was not paying a dividend in 1995, but started paying dividends in 1998. If you know the historical implications of dividends and P/E ratios for the S&P during various economic climates, then this information may or many not help you determine some things. Dividend yields began dropping in the mid 90's as companies instigated massive share buy back programs. This 'shift' has created a natural rise in P/E ratios from other historical periods in time. Yet, PE's will adjust for each economic cycle as it always has before. However, we're not going to be seeing the P/E's of the S&P as low as they were in the 80's simply because dividend yields are lower and the companies are buying back shares, trimming work forces during slower growth periods and managing shareholder value more than dividends. That's a whole other discussion, but if you glance at the average S&P PE or DOW PE today and compare it to the 80's, you'll see what I mean. You can run the PEG's for 1995 based on actual EPS (rather than estimated) for the 5 year period to see if the 1995 PEG valuations were accurate or not accurate. In spite of all of that, here are the returns of Intel, Cisco, Microsoft in relation to the Nasdaq Composite since the beginning of 1995 to date:
siliconinvestor.com
Cisco = 1,962%
Intel = 593%
Microsoft = 484%
Nasdaq Composite = 227%
All of those returns have stripped out the majority of the speculative bubble period and the recent correction.
You can also check the historic PSR's at Quicken.com of companies like Intel, Cisco and Microsoft to see how they compare to the current PSR's. The authors spent some time addressing that issue in the book, but we have seen much higher PSR's in the past couple of years than when the book was written. Not only in technology stocks, but other issues as well (Citigroup, Coke, Merck, Pfizer, Harley Davidson, General Electric, Charles Schwab, Proctor & Gamble, etc....).
I hope some of that helps. If you subtract and remove the bubble mania action of 1999 leading into early 2000 from a chart, the Nasdaq - on it's longer term trend - has basically only had a normal 20% correction. That's a normal event for the Nasdaq and puts us in what was a typical correction phase. Remember, you have to subtract that 'bubble' portion out of the longer term trend. It's hard to see that forest through the trees when everyone is focused on comparing the Nasdaq with the Nikkei, but some of the more respectable 'gurus' are seeing that forest. We just don't hear much about it. Everybody else is focused on "bear", "it's all over", "recession" and "general pessimism". At points like this, it's easy to be swayed and give up the longer term strategies that have allowed one to beat the market averages over the years. As I posted in that earlier link from the Fool about Munger and Buffett having a bad year or string of bad years, they don't abandon the strategies that have built them long term success in the face of those underperforming years. Sticking with their strategies, they bounce back. If I subtract the 'bubble' portion of the 1999 to 2000 period and look back at the longer term picture, I'm quite comfortable with the strategies we discuss on this board for the technology portion of my portfolio. As always, it is difficult to see the forest through the trees in light of the past 12 - 14 months. I have no doubt we will be viewing the picture from a different angle a few years down the road from this point.
All the best for 2001 to each and everyone of you.
BB |
