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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: Herb Fuller who wrote (53019)	4/18/1998 4:09:00 PM
From: RetiredNow	Read Replies (2) \| Respond to of 58324

Hey Herb, I can't really explain AOL. I posted to SR earlier saying that AOL is experiencing the general Internet frenzy that gives them a high PE. Formulas are harder to use when valuing erratic companies like high tech companies. They are best for valuing mature companies. But they can be used as a starting point for valuation. But as for IOM, everyone keeps asserting that they are growing, except I see sales decreasing (above and beyond the typical decrease due to the low volume of 1st quarter). (in millions) 09/96 12/96 03/97 06/97 09/97 12/97 03/98 Revenue 310.1 397.1 361.3 400.2 431.7 546.8 408.0 Net Income 12.8 20.4 23.0 26.2 30.0 36.1 (18.6) Net PM 4.1% 5.1% 6.4% 6.5% 7.0% 6.6% (4.5%) Share O/S 274.1 273.4 271.4 272.9 274.1 283.5 265.7 EPS .04 .07 .08 .10 .11 .13 (.07) As you can see, from 12/97 to 3/98, revenue decreased $138.8 MM or 25%. In the prior year (12/96 to 3/97), revenue decreased $35.8 MM or 9%. So this quarter, we should have expected at least a 9% decrease due to seasonality (remember last year IOM was growing gangbusters). Therefore, in the current year, 16% of the 25% was due to a slow down in sales. I think the slow down will become more readily apparent in the next quarter's report. Herb, why do you think IOM experienced a 25% decrease in revenues vs the 9% decrease of the prior year? I'd be interested to know.

To: Herb Fuller who wrote (53019)	4/18/1998 10:05:00 PM
From: stock bull	Read Replies (2) \| Respond to of 58324

<<That being said , you did not explain how AOL can command a 500+ pe ratio because PE has nothing to do with the evaluation of a companies worth when the company is growing at the rate that Iomega and AOL are .>> Herb, I think you can see a few ways why people buy a stock with a PE of 500. I'll try to list some that come to my mind: 1) Just don't know what they are doing. 2) Know what they are doing, but greed has taken over. 3) Trying to time the buying and selling of the stock....before the roof falls in. If the stock was worth some multiple of it's future growth, then I guess it could trade at a PE of 600, or 1000, or 2000, etc. Just doesn't make sense. How far ahead of the growth curve do you think an investor should be? Just my thoughts. Stock Bull