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Technology Stocks : Unisys: Computer Solutions and Services Worldwide

UIS 2.785

-1.8%

3:59 PM EST

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To: Greg Jung who wrote (2481)	10/18/1999 12:12:00 AM
From: DJB	Read Replies (1) of 2818

Hi Greg, >>You quote forward estimates. These are just numbers drawn out of thin air, analysts generally make estimates on the assumption that a model "works".<< For the first 3 quarters of 1999 UIS has earnings of $1.10 per share excluding extraordinary items. Larry Weinbach has stated that he is comfortable with the 4th quarter estimates of $.45 EPS. So for 1999 these are not figures pulled out of the air by analysts. They are numbers confirmed by LW. It is also LW that has stated there will be 15% to 20% bottom line growth in 2000. Since LW has been with the company he has not missed a bottom line projection. Also his revenue projection is 8 to 10% per year. The 3rd quarter had 7% revenue growth before the currency exchange rate problem is taken into consideration. For all of 1999 I believe the revenue growth will be in the 8% range. So if he does miss the revenue it will not be by much. Again these are LW numbers not analysts. Listen to the replay of the conference call. >>OTOH in 1997 this was a $5 stock and my suspicion is that government y2k remediation efforts saved its collective butt. Since then it hasn't earned the amount of money lost in that year, and it should take 5 years at perfect execution to make up for the money lost in 1995,96, and 97.<< Sorry but I fail to see the relevance of this statement. Does a company have to make up past losses before its stock moves up? >>Maybe Unisys is inhabited by super-powerful super-intelligent beings<< With the addition of LW 2 years ago the management of this company has been excellent. Debt has been slashed. Revenue has grown and the EPS has grown at double digit rates. This is not the same company that it was in 1997. >>Join the rest of the software services crowd, which is valued at PE in range of 10-15<< Where do you get this PE range? Unisys is more than a software services company. It provides software solutions to major banks, major airlines, publishing and customized software to many customers. Unisys also provides hardware maintenance support and manufactures and sells hardware. So it is hard to categorizes Unisys as just a software provider. >>my suspicion is that government y2k remediation efforts saved its collective butt.<< This I take is your opinion and not based on fact. The reality is that this is not the case at all. IMHO UIS deserves a PE between 25 and 30. Using the estimate of $1.72 for year 2000 EPS would give us a range of $43 to $52. Dennis

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