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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (41142)	1/23/2011 3:54:47 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78958

re GOOG - >>10% growth, do you think the pe should be less than 20?<< It might get the same multiple than MSFT in this case. I think a PE of 20 with 10% growth is a stretch unless general stock market valuations move much higher. They also would need to start a substantial dividend as well. I did not say that cash is dead, but if they don't use it or use it to buy something for very steep prices, I think a discount is warranted. it's pretty clear the market sees it this way because if companies decide to part from their cash, their valuation typically benefits. Wouldn't you like it if they would say, we don't need all that cash - we generate more from our business, so we can issue a 100$ special dividend? The stock certainly would go up, which tells me that the current situation is not an efficient use of capital.