and for that matter the valuation concerns for other high p/e stocks. from the motley fool"if i perform a simple cash flow model and discount at only 20% I find that juniper has to earn $184 per share in year 10 to justify its current share price, an annual increase of 73%. assuming that the company's cash flow margins stay the same (the rule makers cash king margin), juniper will have to grow its annual revenues from $452 million (quarter two's revenues annualizied) to $108 billion in the next decade. that means that in year 2010 juniper will have to sell $15.32 worth of its equipment for eery man, woman, and child in the world to justify its current mkt cap"this really blows your mind away. have valuation gone that much into the twilight zonE? if so these days of mkt doubts would translate into commiting suicide owning such a security. any knowledgbe poster please add to this analysis. thanks
this really blows your mind away. have valuation gone that much into the twilight zonE? if so these days of mkt doubts would translate into commiting suicide owning such a security. any knowledgbe poster please add to this analysis. thanksKnowledge is power. How's that for my contribution? '-] Market multiples have been and are still being retracted. Some of the companies you point out on various boards on the Internet under the handle of bengali007 at Yahoo! as well as here at the Fool (Juniper, Brocade, Broadcom, Network Appliance, etc...) have seen that natural process occur. Is there still room for more contraction? There probably is in the shorter term. How much? Time will tell. On a personal level, I'm not sure I would consider committing - note the double t (knowledge, I guess) - myself to a thought process of suicide contemplation by owning such securities. Rather, the time spent examining the market segments that each compete in to see if the future holds very much promise for each of them might be of more use. This would help an investor contemplate if any of those companies look poised to continue to grow their earnings and revenues. If some of them look attractive at some point, then an investor could determine if any of them warrant long term investment for their portfolio. That might be energy well used. I came to the conclusion that Juniper, Brocade and Network Appliance looked attractive for my portfolio in 1999. The same for Broadcom in 1998. The type of speculation in the technology markets between the autumn of 1999 and autumn of 2000 was certainly a 'historic' event. However, it did happen and those playing the short side this year are now enjoying their rewards. Yet, some investors have purchased these equities (and others) for the very long term. Time will tell if any of them proove to have been quality investments over the years. Even though it's only a 2 year time frame, things look quite compelling to this point:http://finance.yahoo.com/q?s=brcm&d=2y&c=JNPR+NTAP+BRCDIt will be interesting to view that chart using the 3 year, 4 year, 5 year and beyond points once they are reached to check and see if the buildout of the networks, data storage/transfer and communication semiconductors proved to be fruitful for the companies and their investors.In terms of your 'analysis' on Juniper, I could ask you the age old 'favorite' question served up by AngryCandy on oh so many of the Fool boards:"What's any of that got to do with the stock price?" <ggg> BB
I came to the conclusion that Juniper, Brocade and Network Appliance looked attractive for my portfolio in 1999. The same for Broadcom in 1998. The type of speculation in the technology markets between the autumn of 1999 and autumn of 2000 was certainly a 'historic' event.hmm..so bruce care to inform us on which stocks you've bought this year and feel have the same type of market position of a NTAP or a BRCD?
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