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Adobe Systems Incorporated Message Board

  • ddelruss ddelruss Dec 2, 1997 4:51 AM Flag

    Looks like "The Price is Right"

    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?

    Damien

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    • 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.

 
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