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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: TWICK who wrote (38586)	4/10/2001 8:44:12 PM
From: IQBAL LATIF	Respond to of 50167

MOT earnings are bad, -0.9 against expected -0.7 cents, That is the bad news... but the good news is.. Motorola Cut 1Q Accounts Receivable, Inventory By $1.7B Motorola Cash Flow Positive For 1Q, Sees Same For Year Motorola Has Undertaken Aggressive Cost-Cutting Measures Motorola Cash & Cash Equivalents $4.05B As Of March 31 Price History.. 2001-1996..>> High Price 61.54 49.83 21.96 30.17 22.83 Low Price 15.81 20.85 12.79 18.00 14.71 MOT closed at 15$, near the low price of 1996. Rev History..>> Shows me that with price of 96, MOT rev is around revised 35,500 b $ for 2001 far higher than 27,973 b $ of 1996. At 15 $ you are buying a company with same price as 1996 but much higher revenue. Operating expense was in 1996 26.1 b$ in 2001 they want to cut it to 33 b $ from 35 b $ (24000 pink slips may help reduce the huge 5 b $ ad cost) increasing a chance of operating income of 1.5-2 b $ by end of year 2001. In 1996 operating income was 1.775 b $ in 2001 if economy stays slow and sales as the first quarter (7.87 b $) has shown do not improve significantly, the operating income of MOT may be better than 1996 that sold for 15$. The company you are buying in 2001 for 15 $ or tomorrow 12$ or even less has on Research & Development spent from 1996 amounts of $ b 4,437.0 3,560.0 3,118.0 2,748.0 repectively for the year 2000, 1999, 1998 and 1997, a total of nearly 14 b $ which are expenced as operating expense. Assets and liabilities.. chances of MOT bankruptcy!! 1996 this company had total current liabilities of 8 b $ now doubled to 16 b $. Inclusive of long term debt that would ocme to 24 b $ from nearly 12 b $ in 1996. This is the tricky part, what impact does this have on book value or say the net equity of MOT, total assets have grown from 24 bn $ in 1996 to 42 b $ in 2000. The total equity is grown to 18 b $ from 11.8 b $ in 1996. The current debt has increased in much higher proportion than the current assets, that is a concern but against that you are buying a company that has sunk in 14 b $ in last four years in research and development and has total net equity much higher than 1996 11.7 b$ nearly to 18 b $ and you can still get it cheaper than 1996 prices. I will not touch MOT if you think that economy will come around fine and world will not end MOT at 10-12 $ is a very good stock to own and this is the reason so far although MOT is down to the chagrin of the bears no sign of a big melt down. In my opinion if you analyse these numbers right you would see the negativity on hte bear threads has more to do with frame of mind than actual facts, and so far PEG is not even included in htis package if MOT gets on track for 15% growth than.. I rather leave it at that...