I don't know too much about Adobe the company yet...I know a bit about their products. All I have seen is the financials and news, etc. Given that, I'd like to say that Adobe looks like a long time winner (5 year earnings, revenue growth) that has recently become affordable given the under 15 multiple (P/E). Also, they have no debt (that's NONE) along with a ton a cash and increasing sales and margins. Given the low price, no surprise they are buying back stock, another good sign. To go along with the strong balance sheet, they have been squeezing better earnings out of existing business, a sign of smart, active management. It also appears that their products are gaining popularity and even won some award at Comdex. Anyone have any reason to doubt the prospects of Adobe? Does anyone know the historical multiple as compared with the current? Insider holdings?
Here is why I own Adobe: -industry leading products -Acrobat is one of the widely relied upon products for reading documents off the web -no debt & lots of cash -and, best of all, like Microsoft, Intel, Thermo Electron, and others, they have made investments in other technology companies with their excess cash. Even if they can't grow their product line much (which I doubt), these investments could bring a huge payoff. Adobe announced earlier this year that they might begin spinning off their ownership in these other companies to their shareholders. Read "Get into an Incubator" in the Dec '97 issue of Bloomberg Personal (www.bloomberg.com) and "Best in the Nest" in the Dec '97 issue of Individual Investor (www.iionline.com) for more on this concept. Buying companies that own pieces of tech startups seems like a much safer way to participate in tech IPOs than trying to do the research yourself.
sept 19,1997,adobe systems inc. saids its board authorized the repurchase of up to another 15 000 000 of its common shares from time to time over the next two years. the companie said it had 73 000 000 shares outstanding at the end of the third quarter of fiscal 1997.