Adobe Is Dead (*)
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Analysis by Alex King, CEO, Cestrian Capital Research, Inc.
Before you read this, because this note is going to talk about fundamentals and valuation and cashflow and that kind of old-fashioned thing, you should first read this:
Alex King
The above note explains why all that old-fashioned stuff doesn’t matter. And in the main, it doesn’t. Nobody cares about fundamentals anymore; options flow and fast money determine everything, as we know.
However.
When stocks are so hated that they have no interest at all from hot-money buyers and nothing but shame is poured up on the owners of said stocks, then and only then is it time to look at some actual company numbers to decide if this is reasonable. Because look:
Of course there are plenty of examples to the contrary, where stocks turn out to be cheap-not-cheap for a reason. But let’s look at $ADBE on the basis of, everyone has declared the stock dead, or nearly dead, and you can buy it right now for 6.6x TTM unlevered pretax FCF.
So, should you?