Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Paint The Table -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (11382)	1/24/2002 5:16:30 PM
From: Original Mad Dog	Read Replies (1) \| Respond to of 23786

Well, maybe it is over, maybe the economy is looking up.... But look at a company like JDSU. Market cap as of today's close of $10.5B. More than a billion shares outstanding, so they need a market cap of $13B or so just to get to ten bucks a share. They miss their earnings by a mile, their revenue is cruising along at maybe 2 billion a year, their cash flow from operating activities has struggled to stay positive (positive by maybe $100M in the past 12 months before this latest report, see biz.yahoo.com. Doesn't look like a wildly undervalued stock to me, even at tomorrow's likely opening price of $7 a share or lower. Now we'll look at INTC..... They sell at roughly 8 or 9 times sales.....and although they have a strong market position their margins have been eroding..... and their profits have been miniscule lately. They may come back some, but at a market cap of over $200B, I don't see them exploding to the upside. CSCO? Their story in some ways is similar to INTC's....priced at 7 times sales, strong market position but struggling to make money, margins under continuing pressure. MSFT - powerful market position, yet we all know they face many troubles, legal and otherwise. And they are already priced at 13 times sales and 58 times earnings...well below the bubble levels, but well above what one can reasonably expect in the long term. So four of the leading companies in tech from a marketplace perspective.....the dominant software company, the dominant router/networking company, the dominant chipmaker, and the dominant fiber optic company..... all seem reasonably valued even if the recession is only mild and short-lived. Where does the fuel for a rally come from?