Michael Murphy's view ... from Yahoo BB.
I agreed BMCS will be back once the Y2K hurdle is past.
April or May options should be good plays.
Mikey...in at 45 1/16 with 2002 Jan 50's @ 18 1/8.
Here's Michael Murphey's response
by: joesnoshmo 1/6/2000 10:29 am EST
Msg: 6761 of 6892
BMC Software (NASDAQ: BMCS) is down sharply today on the announcement
> that their earnings in the December quarter will be about flat versus
> last year. That's only a 9½ disappointment compared to the Wall Street
> estimate, but they absolutely killed the stock this morning. At one
> point it was down almost $30 to $47-1/8!
>
> The source of the disappointing earnings was a small shortfall in
> revenues. While the company will not use Y2K as an excuse, the truth is
> the December quarter had a lot of cross currents that caused this
> shortfall, including some customers who were concerned about upgrading
> to new software in advance of January 1. Most of the sales that didn't
> close were in North America, but that has been and will be one of the
> strongest geographies for BMC's products and I expect it to snap back
> quickly.
>
> I want you to buy BMCS today, taking advantage of the Wall Street panic.
> I expect a quick snap back to $55-$58, followed by a climb to $65 after
> the March quarter earnings are reported in late April. By the end of
> 2000 I expect the stock to hit $85 or better. This is exactly the kind
> of buying opportunity we wait for in Technology Investing--don't miss
> it.
>
> The news about BMCS is dragging down other big software stocks like
> Oracle and Sterling Software, but my worries about the direction of the
> overall market make me reluctant to strongly recommend those other
> stocks-yet. As I mentioned on the Hotline last night, I think the key
> to what's happening in the market right now is liquidity. Individuals
> and mutual fund managers were aggressively buying stocks during the last
> couple weeks of the year, and now everyone appears to be out of cash.
> We're also seeing a lot of profit takers who did not want to pay taxes
> in 1999 make their moves this week.
>
> I've been telling you for a couple of weeks to expect this correction.
> Do not worry about it. I view it as an opportunity to buy stocks as
> they come down below my buy prices. I do not recommend that you sell
> anything except for Linear Technology (which, as I advised you on last
> night's Hotline, we are selling to make room for a better opportunity
> that I will tell you about in the new issue of the newsletter, which I'm
> currently working on). The dominant industry leaders that we invest in
> should all be significantly higher by the end of 2000, and I expect that
> this dip will set us up to make 30%-90% profits in the year ahead.
>
> Sincerely,
>
> Michael Murphy |
