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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: iod_sherwood who wrote (69462)2/18/2001 12:29:17 PM
From: waverider  Read Replies (2) | Respond to of 99985
 
OK your valuation perspective is valid. But we both know that the market has always paid up for growth and will continue to do so, bear or bull. I venture to say that most of the investment community is not interested in common stocks as dividend paying vehicles. There are much better instruments for that in terms of income. Hard to beat tax free bonds.

With the still projected EPS of JDSU of .97 for the next year ('02) (assuming it holds) we are are talking about a PE of 36. The 100 PE you mention is rear view mirror stuff. The market cares little for that. So based on current estimates you are paying 36x a 35% grower. Not a bad valuation at this point.

We could argue that JDSU is not going to meet those estimates at this time and I would grant you that there may be some slipage, but we don't know that yet. We also don't know what the economy is going to be like 6 months out. Based on what we know about the world's desire for technology, it would consider a good bet here would be to start accumulating JDSU.

Getting back to Ford or GM or any other big manufacturer you care to pick...their stock prices have basically gone no where forever when compared to growth companies. Yes, if you were to sell the assets now, you might have a point in terms of hard cash...but the market is a place of dreams and dreaming about auto growth just doesn't cut it.

Rick



To: iod_sherwood who wrote (69462)2/20/2001 12:46:19 PM
From: Gone to Money Heaven  Read Replies (1) | Respond to of 99985
 
It means it will take 100 years for that company to generate in earnings

those earnings would have to remain the same for the
next hundred years for that to be the case.

now if earnings go down 50% in year 2 then it would take
more like 200 years to accumulate in earnings what you
paid for the stock.

the converse situation of increased earnings in year two
would also change the time line of repayment.


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