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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 87.31

+3.2%

Nov 21 9:30 AM EST

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To: Carl R. who wrote (1606)	6/15/1997 10:53:00 AM
From: Jeff Maresh	of 14451

Hi Folks - Here is the info I promised to post. On valuations... Company 5-yr ROE D/E PTax Margin PSR GTW 40.9 0.01 7.7 1.01 DELL 28.9 0.02 9.6 2.55 CQP 20.3 0.05 11.3 1.68 DEC -7.8 0.28 -3.0 0.38 HWP 17.4 0.19 9.7 1.40 SGI 13.5 0.23 -2.2 1.19 SUNW 17.1 0.03 11.9 1.67 Data is as of 6/5/97. I listed the top 3 PC (and NT) box makers and the top 3 Unix workstation manufacturers in addition to SGI. Note that margins on the PC box makers are as good as the top workstation manufacturers. So the argument of "you can't make money on commodity boxes" just doesn't hold water. Granted, these companies also sell stuff other than NT boxes, but they sell nearly all Wintel products. HWP is there for comparision since they are a top Unix box maker but they manufacture a lot of other stuff in addition to Unix boxes. Comparing DEC with SGI, DEC has negative margins simply because they are selling products below their cost to produce them. SGI's negative margin is due to the Cray writeoffs and it is something more like 3-4% pro forma. The ROE on DEC is also pretty bad indicating poor management. The PSR on SGI has already moved up quite a bit off its low of around 0.77 after April 19. The historic highs have been around 3.1. As the company grows larger, higher PSR's will be harder to achieve. Even so, SUNW with twice the revenue as SGI is valued at 1.67. At this PSR value, SGI would be valued at about $25 right now. As far as the analyst's recommendations, they look like a shell-shocked bunch. While most are neutral, it's interesting to note the ACE earnings expection for next year is still 1.40. Regards Jeff SILICON GRAPHIC 6/ 8/97 ZACKS ANALYST WATCH MEAN HIGH LOW NUMBER MEAN CHG EST LAST MNTH ($) FISC YR END 6/98 1.40 2.17 1.10 14 -0.01 FISC YR END 6/97 0.56 0.91 0.46 16 0.00 VS ACTUAL 6/96 1.39 QUARTER END 6/97 0.37 0.57 0.27 15 -0.02 VS ACTUAL 6/96 0.46 QUARTER END 9/97 0.23 0.39 0.12 11 -0.01 VS ACTUAL 9/96 0.07 NEXT 5 YR GRTH (%) 20.45 25.00 15.00 10 0.00 ESTIMATES & ACTUALS ARE BOTH EPS BEFORE XTRAS & OTHER NRI'S Zacks analyst watch report: SGI Page: 2 SILICON GRAPHIC 6/ 8/97 WALL STREET RECOMMENDATIONS SGI RANKED 9/ 10 IN COMP-MINI IND RANKED 153/211 R I I I I I I I I N R R I N N Z -------- -------- -------- -------- -------- STRONG MODERATE HOLD MODERATE STRONG BUY BUY SELL SELL N = NATIONAL RETAIL BROKER; I = INSTITUTIONAL BROKER R = REGIONAL BROKERAGE FIRM; Z = ZACKS INDICATOR RANKING (EPS FORECAST REVISION MODEL) ( + UPGRADE SINCE LAST WEEK; - DOWNGRADE ) Zacks analyst watch report: SGI Page: 3 SILICON GRAPHIC 6/ 8/97 COMPANY VS INDUSTRY ---------- EPS GROWTH RATES -------- P/E ON LAST 5 YRS 97/96 98/97 NXT 5 97 ACTUAL (%) (%) (%) YRS(%) EPS COMPANY 55.4 -59.8 149.9 20.5 30.6 IND: COMP-MINI 13.9 -4.6 26.2 17.8 22.8 (T=299) S & P 500 12.6 10.2 5.5 6.7 19.2 ------------------------------------------------------------ COMPANY-INDUSTRY 41.5 N/M 123.8 2.6 7.9 COMPANY-S&P 42.7 -70.0 144.4 13.8 11.4 Zacks analyst watch report: SGI Page: 4 DISTRIBUTION OF EPS ESTIMATES HISTOGRAM AS OF 6/ 8/97 SILICON GRAPHIC FY1 - 9706 FY2 - 9806 16 ESTS. 14 ESTS. OO O XX O O XX X X O O X XX XX X X X XXXXX X XX X !-----!-----!-----!-----! !-----!-----!-----!-----! 0.45 0.60 0.75 0.90 1.05 1.08 1.38 1.68 1.98 2.28 "X" = EPS ESTIMATE ($) "O" = THREE MOST RECENT ESTS. Zacks analyst watch report: SGI Page: 5 6/97 QTR: SILICON GRAPHIC 9/97 QTR: EXP.REPT: 7/31/97 EXP.REPT: 10/17/97 X XO OO O O O X XXX XXX XX X OOO O O X X X !-----!-----!-----!-----! !-----!-----!-----!-----! 0.26 0.36 0.46 0.56 0.66 0.12 0.22 0.32 0.42 0.52 MEAN 0.37 (15) MEAN 0.23 (11) MOST ACC 0.36 ( 3) MOST ACC 0.20 ( 8) ------------------------------------------------------------ QTR END % SURPRISE ACTUAL ESTIMATE STD DEV. # ANALYSTS 6/97 N/A N/A 0.37 0.08 15 3/97 -66.97 0.09 0.27 0.04 16 12/96 333.33 0.01 0.00 0.02 14 Zacks analyst watch report: SGI Page: 6 SILICON GRAPHIC-NYS - 2.000 12/16/93 - 6300 EMPLOYEES SILICON GRAPHICS IS THE WORLD'S LEADING SUPPLIER OF VISUAL C OMPUTING SOLUT IONS. YEAR EPS BEFORE XTRAS & NRI'S -CUR- HI/LO 1ST 2ND 3RD 4TH YR( 6) PRICE 17 28/ 12 98 0.23E 0.33E 0.35E 0.52E 1.40E PRC/EPS 27 32/ 15 97 0.07 0.01 0.09 0.37E 0.56E REL P/E 1.3 1.7/0.9 96 0.33 0.30 0.31 0.46 1.39 YLD 0.00 IAD NA SINCE 10/87 DEC SLS(MM$) NET(MM$) EPS-XNRI EPS-REP DIV/SH HIGH LOW 96 2921 115 1.39 1.39 NONE 30 19 95 2228 324 1.39 1.28 NONE 42 28 94 1481 140 0.86 0.86 NONE 31 22 Brokerage Firm Date of Last Update Recommendation Major Broker 05/12/97 NEUTRAL JOSEPHTHAL LYON & ROSS 05/07/97 HOLD SMITH BARNEY INC 04/30/97 NEUTRAL-HIGH RISK THE CHICAGO CORPORATION 04/30/97 HOLD Major Broker 04/30/97 BUY SOUNDVIEW FINANCIAL GROUP 04/25/97 HOLD BEAR STEARNS & CO INC 04/22/97 NEUTRAL Major Broker 04/22/97 N/A Major Broker 04/21/97 MARKET PERFORMER MONTGOMERY SECURITIES 04/21/97 HOLD Major Broker 04/18/97 NEUTRAL COWEN & COMPANY 04/18/97 NEUTRAL SALOMON BROTHERS INC 04/18/97 HOLD Major Broker 04/18/97 Major Broker 04/10/97 N/A HAMBRECHT & QUIST LLC 04/10/97 HOLD OLDE DISCOUNT 03/26/97 ACCUMULATE FURMAN SELZ INC 03/04/97 FOLLOWED

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