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Technology Stocks : Network Appliance
NTAP 114.72-0.9%3:59 PM EST
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To: SecularBull who wrote (6189)2/7/2001 5:44:06 PM
From: jmanvegas  Read Replies (1) of 10934
 
I sure am! Let's take a look at GSPN, for example. Now we're comparing apples to oranges but let's just compare. GSPN handily beat the Street and raised guidance. The stock ran up to $44 but traded under $30 today. Why? Because of CSCO. Nonsense. Because this is a trader's market. The fact is GSPN will do about $650M and have a 40-50% growth rate in fiscal 2001. Market cap is around $2.5B. NTAP should do about $1.3-1.4B in 2001 - growth rate of around 60-70% - market cap around $13B. So which is the more compelling buy as far as GARP. Now please don't get me wrong. I'm lightly long NTAP and started buying yesterday. But I've been through excellent earnings' reports from various tech companies and lo & behold, I got hammered a few days later after I thought everything was going to be rosy for those stocks. And I got hammered on what I thought were reasonably priced midcap stocks. The question is whether NTAP is reasonably priced based on its market cap and obvious slowing sequential growth because it can't grow 100%/year forever. The projected earnings/share for 2002 is .58. Giving a multiple of 60 in 2002 gets a price of $35/share in 2002. Why am I long on NTAP - I'm trading it. BTW, I'm long on GSPN. But that one I'm holding just because it has a reasonable valuation and market cap. Will I be right - who the hell knows in this precarious market. But I would not want to bet the farm on large caps at this moment in time. Good luck.

jmanvegas
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