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Technology Stocks : All About Sun Microsystems
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To: techtonicbull who wrote (31009)4/16/2000 10:51:00 PM
From: E_K_S   of 64865
 
Hi Techtonicbull - Do you currently own any SUNW now? Where were you last year or two years ago? Sunw's current price is equivalent to where it was on 08/26/99. The big gains are made through a buy and hold strategy, IMO, if you believe management will continue to deliver growth. Is the current price of a 60 PE (forward PE) a bargain price?

Sometimes investors can get too caught up in the day to day price changes in the stock and in the general indexes. An approach I take is to simply cost average into a company at a price level that I feel is fair.

If you currently do not have a position, this week may be an excellent time to begin to accumulate one.

I guess I am pretty lucky as I have established my position over the last several years where the PE was 20. The company had a previous track record of growing their business at 20% per year. Now the expected growth is in the 30%-40% range. The stock has traded as high as 2-2.5 times its growth rate (or a PEG ratio of 2 or 2.5). I calculate the current PEG at around 1.5-1.8.

What's your expected holding period? I continue to hold with a three to five year target (or longer) as long as management continues to deliver their stated growth target of 25%.

I will buy more only if the stock trades at a PEG of 1 or less or around $56-$60.

EKS
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