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.

Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Marcellus who wrote (3281)	9/26/2002 1:15:11 AM
From: Cary Salsberg	Read Replies (2) \| Respond to of 25522

Add growth rate to ROIC. If a company pays out most of the return in dividends it doesn't grow rapidly. If it can reinvest most of the return and still maintain the ROIC, it will grow rapidly and be more valuable than the first case.

To: Mark Marcellus who wrote (3281)	9/26/2002 10:49:50 AM
From: Kirk ©	Respond to of 25522

Thanks I found a good article on ROIC using Google fool.com In your example of MSFT vs Coke for high ROIC numbers, it occured to me that one has "stock option problems" while the other I believe has "pension funding problems" which sure shows why nobody really trusts the numbers these days. Also, I've seen many "marginal at best" companies sell their land where the inflated cost didn't show in the book value, and then lease it back to make their numbers look better. IF we did have a real estate bubble, then this might be a smart move, but the time of the moves came when commercial real estate sits vacant in many areas. A good example is I have not seen Cisco sell its empty buildings and lease back the ones it needs... anyway, thanks for the info. The question still falls to "how do you place a fair value on a company given any set of numbers?"