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Technology Stocks : BEA Systems (BEAS) - Undiscovered Growth Stock
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To: junjun dator who started this subject7/30/2001 9:42:25 PM
From: wgh613   of 2477
 
From the "Trend" thread:

To:Susan G who wrote (2452)
From: keithcray Monday, Jul 30, 2001 9:29 PM
Respond to of 2463

From this mornings Story Stocks:
BEA Systems (BEAS) 21.84 +0.31: Shares of BEA Systems are bidding higher this morning behind the company's announcement that United Airlines (UAL) will be using its infrastructure software. The announcement is significant because it represents yet another blue chip customer for BEA and also because this is an old economy company with a demanding IT infrastructure. United offers nearly 2,300 flights a day to 130 destinations in 27 countries. The bigger question from an investment perspective has been where BEA stands fundamentally. Since mid-June, the shares have literally been cut in half -- from a high price of around 40 to prices under 20 just last week. In light of the recent 50% discount have the shares come down enough to represent a compelling value? Based on this morning's price, the shares currently trade at 51.9x earnings estimates for fiscal 2001 and 35.9x fiscal 2002. Long-term growth rates for the company continue to be projected in the area of 50% which means BEA's PEG (Price/Earnings to Growth Rate) factors to a compelling 1.04x -- unusually low for a business expected to grow so rapidly. The catch comes when you consider those numbers are based on analyst estimates and projections which have been far from reliable over the past year. If it turns out the analysts are right, a purchase of BEA shares at current levels is likely to do very well over the next several years. On the other hand, if the company begins to guide down its forward projections the outlook for BEA shares could change quickly as well. To this point, BEA has beaten analyst estimates seven out of the last eight quarters (it met estimates on the other report). The company has yet to warn and it reports its second quarter results on August 14 -- the consensus expectation is for BEA to make $0.09 per share. While BEA looks attractive on the basis of its historic performance and currently available forward projections, we believe there is also a fair degree of risk in the forward growth projection. Nonetheless, BEA is one worth keeping an eye on as it should be well positioned for growth once IT spending in the macroeconomy begins to reaccelerate. -- Michael Ashbaugh, Briefing.com
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