
CONCLUSION 25
be described as having fairly modest levels of profitability. During recent years,
the rate of return on stockholders’ equity (ROE) for Nasdaq companies has
averaged in the low single digits, or less than 5% per year. Contrary to popular
perceptions that profits were growing rapidly for Nasdaq companies, NASD data
suggested stagnant profits. Little or no profit growth during the 1999–2000 period
was common. In contrast, during this same period, the ROE averaged 20%+ for
components of the DJIA and the S&P 500, and double-digit earnings per share
growth was common. Valuation data for the Nasdaq 100 were only slightly more
typical of conventional ...