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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: zbyslaw owczarczyk who wrote (10385)	3/22/2001 10:28:43 PM
From: WiseGuy	Respond to of 14638

"Right now, Nortel trades at 1.5 times this year's revenues, and 1.3 times next year's revenues. Those numbers have got to come down," says a New York-based hedge fund manager who has no position in Nortel. "They can't grow by 12% this year and then another 22% in 2002. I just don't see it happening." ----------------------------------------------------------------------------- If NT's sales were to go down, then the P/S would actually go up, assuming the price didn't change. In short, this guy was basically talking down the price of NT without actually mentioning it. However, when one talks about price, one must take into account valuation, which he did not. NT's P/S of 1.5 is lower than the majority of its peers. NT's P/E of 26 (using Zacks .68 for 2001) is also as cheap as the S&P500 P/E. In other words, his statements don't carry much weight because he was primarily talking about price, but failed to discuss valuation. So much for these supposedly intelligent talking heads. Sounds like they keep trying to instill additional fear and doubt. There is enough already. Don't need any more.