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Technology Stocks : Computer Associates

CA 24.96

0.0%

Dec 9 4:00 PM EST

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To: DEER HUNTER who wrote (4682)	7/12/2000 8:22:55 PM
From: Marq Spencer	of 5232

DH, I'm in the same boat as you are. Very long on CA and down a bunch. I too thought that we were looking at new highs later this year. Looking ahead, my personal thoughts differ from Joel's. I think that the down side is already baked in - maybe lose another point or two but that's very limited compared to the upside ahead. Think about it, even with the lowered estimates (around $2.85 for this year) CA's PE is below 10x! I think a value guy recommended this stock yesterday on Bloomberg. I think that three things will happen this year to move the stock up - IBM G7 cycle in the second half, improving software purchasing climate, and a focus a CA sales to show Wall St. what CA can do - I remember that when CA missed in Dec 1996, sales came with a vengeance for the next six quarters. However, I don't think that the recovery will be rapid. My gut feel is that it'll take three quarters of solid numbers (beating the revised estimates by 2-3 cents each quarter) to get back to the 50s. BWDIK. - Marq.

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