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Subject:  Re: Let's Refine the P/S Discussion Date:  12/8/2018  1:04 PM
Author:  XMFBreakerTinker Number:  106427 of 115977

They all look reasonably priced to me...

But unfortunately the numbers. are. not all equal. Dang ipad keyboard......

Take. Zuo. It is more expensive than it. seems because part of their revenue is like Nutanix’s pass through hardware was, worthless. Thus, althoug it seems cheap it is not. Making it probbly the worst sort of thing to get into and why it has underperformed (not to mention touting a book instead of the companies business prowess...but as i said when others appear expensive, and a cheap stock comes along that seems revolutionary, misunderstood by the market, and run by a visionary, groupies start forming a line behind it).

Revenues by Zs are not the same as by most other companies. Why? Higher switching costs, but more than this, after year 1 the revenue stream has very little marginal cost. Compare this to a Nutanix that has to go out and earn its sales every year and pay commissions on it every year, with the market characterized by rabid competitoin and rapid technological obsolescence.

AYX is more similar to Zs in that manner.

The economics are just different. period. Thus no matter how you slice it you are putting an apple on one plate and a banana on another.

Destiny is all...I think is quite fittign in the end. Clearly none are in a bubble, we focus still too much on the past, and it will be the companies with long term business success that will win.

Put it this way, If you own Zs and its growth suddenly slows to 25% as is hypothetical, who would continue to own it? Not me, and further not me at any price. So it is a false choice.

ISRG still has a multiple similar to ABMD believe it or not! Although only growing in the mid-teens! The power of CAP and perceived TAM still despite a $50 billion marketcap.

If you plan to hold any of these stocks as if they are ISRG, and hold the no matter what their growth comes to, then it is a discussion that makes sense. Otherwise not so much.

I get information from the multiple. As we have seen the multiple is completely inverse to the relative performance, at least this year, and at least in the market crash of October. The opposite of what its proponents propose as the true rule that the world will follow.

Any why is this? the higher multiple stocks have better fundamentals

That summarizes my point. No bubble, no near-bubble, then look to the fundamentals. Fundamentals will control where money flows. Those fundamentals are CAP and Growth, and Marketcap to opportunity. Narrowed down even further.

ISRG and AMBD illustrate CAP to maintain a high multiple. a high multiple forever, such as these companies exhibit are only obtainable with very high CAP even though they both have moderate to low growth (ABMD 25-35%, ISRG 12-15%).

Don’t give me Cisco, it was a bubble! That is by definition not part of this discussion as that is a sell sign.

Fundamentals. If you want to go looking for lower price to sale, thinking they will outperform, then you need to find hidden fundamentals, or fundamentals that will turn. Then be patient.

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