Sunday, July 15, 2007

Four pillars of Tech

Kramer classifies these four companies as the four pillars of tech. According to him these are the standard bearers for the first decade of the 21st century. It is anyone's guess if their dominance will last till the next decade - most likely it wont if we look at tech wonders from the nineties - Intel, Microsoft, Cisco, Dell and Yahoo!

Here are the four companies:
RIMM - blackberry a must for corp execs.
AAPL - iphone and ipod. iphone is getting to be a competitor to blackberry in the longer term.
GOOG - 'nugh said. Goog is planning a free google cell phone with its own apps. Going against apple? May be.
AMZN - virtual warehouse, S3 and EC2 services.

AMZN - market cap of 30 billion and free cash flow of 500 million - ratio 60
GOOG - market cap of 172 billion and free cash flow of 1.8 billion - ratio 95
AAPL - market cap of 120 billion and free cash flow of 3.9 billion - ratio 31
RIMM - market cap of 40 billion and free cash flow of 480 million - ratio 83


Let us take another swap by looking at stock dilution at each of the companies.

AMZN - has remained flat in the last few years probably because of buy backs.
GOOG -should be 6-7% range or higher
AAPL - about 2.5% dilution per year
RIMM - no dilution in last year - most likely because of buy backs.

Berkshire (BRKA/BRKB) on the other hand throws off cash better than most companies in America. Its price to cash flow ratio is less than ten making it a bargain compared to any of these tech stalwarts. Moreover, the stable of businesses that are part of Berkshire are likely to remain solid and kicking long after today's tech titans make way for another round of upstarts in the next decade.

2 comments:

JJ2000426 said...

SWC down another 8.25% today. In the past three days it dropped a total of 20%. SWC is the only palladium and platinum producer in the US. Palladium and platinum are very important precious metals that see price trippled in the past three years. This is a stock with extremely bullish fundamentals and this may well be the CAPITULATION event where you get an excellent entry point. See my analysis of the SWC fundamentals.

JJ2000426 said...

SWC down another 8.25% today. In the past three days it dropped a total of 20%. SWC is the only palladium and platinum producer in the US. Palladium and platinum are very important precious metals that see price trippled in the past three years. This is a stock with extremely bullish fundamentals and this may well be the CAPITULATION event where you get an excellent entry point. See my analysis of the SWC fundamentals.