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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (9490)	10/15/1998 1:09:00 AM
From: Phil Jacobson	Read Replies (2) \| Respond to of 29382

Thanks Sergio, was wondering why QWST was up today. I understand what the article said about it having a relatively low multiple of price to EBITDA, but at some point the depreciation does become relevant and I believe for QWST it definitely matters. In the new data telecom companies, it's common to move huge amounts of equipment from the core of a network to the edge, then completely out altogether, after only 3 years. There is a pretty high risk that a lot of these companies are going to see large writedowns of assets as a result because many of them are depreciating these assets over a much longer timeframe. So, assuming I'm correct that the EBITDA argument doesn't hold that well for QWST, a stock that trades at 109 times earnings is always a good short candidate in a market like the one we're in. Phil