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Strategies & Market Trends : Shorting stocks: High fliers
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To: ynot who wrote (678)7/8/1999 12:10:00 AM
From: Mad2  Read Replies (1) of 709
 
Dear ynot;
I agree with you that ITWO is a segment gorrilla, however they've had a nice run since they're October low runing up 4.5X. They're projected to earn .45/share (giving them a p/e of 100:1 and 70:1 based on next year) this year and to hit it they need to finnish strong to hit it. The shorts have sold 15% of the float (ratio of 4.54). I perscribe to the view that corporate IT decisions will be short term focused in the next 6mo and that will dampen the prospects for many in the software/hardware segment including quality outfits like ITWO.
Personally I like ITWO and kick my self for not buying when they were in the teens last fall (Y2k concerns have caused me to avoid the software/IT segment). I do think if ITWO misses earnings it would present a buying opportunity for a company with excellent prospects looking out 12-18 months.
I believe that SAP and PSFT are overvalued. A value play in ERP area is MAPX (and they're more a pure ERP play) who was at a low of under $4/share back in April and has since rebounded to just under $10/share. Good chance they'll continue to have earnings troubles through the balance of the year (little over half their revenue is license the other half is services (help desk and stuff unaffected by Y2K etc).
Mad2
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