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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: HeyRainier who wrote (79713)1/20/2000 12:53:00 PM
From: Lane Hall-Witt  Read Replies (3) of 120523
 
I've long felt that the market doesn't adequately value the IT services and outsourcing firms in PER's peer group. The field is growing (PER is expected to show 24 percent annual growth over the next five years), and these companies do mission-critical work that's absolutely essential to the information economy. PER's P/E/G is only about 1.5, which is extremely modest in this overall market. By contrast, the P/E/G for EDS going forward is over 2. (Another great company, KEA, has a P/E/G of about 1. It's still shaking off the effects of having been a Y2K services company.)

I don't know what my price target would be on it, but I would think the prospects for long-term appreciation are good. PER is surging again today; however, I still think it's a hard one to trade short term. Who knows when news (like today's NOVL deal) will come along to shake the stock out of its slumber? The earnings lumpiness, which is to be expected for companies that depend so much on these large contracts, also makes it difficult to trade with confidence over the short and intermediate term.

It looks like the news run has messed up your options experiment.

I'd have to go back and check the filings to see about the next lock-up expiration. That smashed the stock a couple of quarters ago: some moron had a million shares ready to sell as soon as the doors opened. That was partially responsible for creating the psychological shadow that still haunts the stock.
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