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Technology Stocks : MSGI Marketing Services Group Inc. -- Ignore unavailable to you. Want to Upgrade?

To: wbASSETt who wrote (1238)	6/3/1999 9:48:00 AM
From: stock_bull69	Read Replies (2) \| Respond to of 3418

Found this interesting post talking about comparitive valuations for MSGI on the RB site: Keith Benjamin at internetstocks.com uses 22.8x for a network co. and 14.4x for an etailer. But are those the correct multiples for a marketing firm that is part traditional, part internet w/I assume the internet marketing becoming more dominant over time. Two of the top three big cap marketing co., that appear to do traditional marketing (at least I am not aware of their involvement in internet marketing) are OMC and IPG. These big cap marketing firms have revenues and mkt caps of $4.1 bil/$12 bil cap and $3.969 bil/$10.997 bil cap, respectively. Their multiples is roughly 3x. Big difference here versus the about internet multiples (but part of the internet multiples is based on "future earnings"). Current prices for OMC and IPG are 71 7/16 and 78 9/16. If you were to divide the o/s shares into the mkt caps of these two companies we have a stk value that is dog gone close to th current MP. OMC has 168.5 mil sh o/s while IPG has 139.9 mil sh. o/s. We then have a stk price of $73 for OMC and $78.55 for IPG. Another research may be to isolate strictly internet marketing companies (which I haven't done yet) and see what multiples are applicable. And use that multiple on MSGI. Using only a 3x for $250 mil will yield a cap of $750 mil divided by 12. whatever sh o/s for MSGI you have $60.00. I suggest that this is too low as it doesn't include the "future internet revenue stream" that should be huge and significant based on our assumptions on the anticipated growth of internet ad revenues. And we know that any company in any internet sector, incl. marketing will price in the future income streams. Check out what multiples DCLK, Flycast, AdForce have relative to their earnings and stk price. That would get us closer to a "fairer" valuation of MSGI. Steve