Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: Susan G who wrote (101127)	6/7/2000 10:40:00 PM
From: Connor26	Read Replies (1) of 120523

Susan - you like BEOS, i like BEAS - news.. BEA Systems worth its price? Ready to take the plunge back into technology stocks? The Individual Investor Web site is, joining the growing consensus that the springtime shake-out is over. And the site?s newest recommendation is one of the big players in the online transaction business. The site recommends BEA Systems (BEAS: news, msgs) despite its lofty price and says it should be a core holding for some technology investors. Updated: 6/7/2000 4:36:58 PM ET BEA Systems provides the software that enables companies to build their e-commerce systems. Its products include transaction processing, messaging and distributed object-based software for functions like billing, customer service and supply chain management. BEA sells directly through its own sales force, and indirectly through independent software providers. It also has relationships with companies like Hewlett-Packard (HWP: news, msgs), Nortel Networks (NT: news, msgs) and Nokia (NOK: news, msgs). The company?s merger with WebLogic has increased its offerings. In fact, II Online says the merger actually gave BEA its fastest growing products. WebLogic products accounted for 59 percent of its license sales in the latest quarter, and contributed 35 percent of licensing revenues. BEA Systems has grown revenue an average of 81 percent in each of the past four quarters on a year-to-year basis while earnings have grown an average of 136 percent and have beaten earnings estimates by an average of 29 percent. The company?s overall gross margins fell because of a heavier weighting in service revenue which isn?t as profitable as licenses. But II Online says management has indicated that licenses should make up a greater portion of revenue going forward. Individual Investor says the bottom line is that BEA is expensive by traditional valuations. But the stock epitomizes the new economy, and the site says it should be a core holding for aggressive growth investors with a taste for high risk, high reward plays.

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