They say you should never predict both price and time. <g>
I wish I could say with some authority that today's low would hold, but the truth is I don't know. It surprises me that SUNW is as low as it is, and I "put my money where my mouth is" by buying more today, but there's no "right" valuation "out there." If more willing sellers emerge than there are willing buyers, then the price will reflect that fact. The reverse is also true. Psychology and other factors (like the margin positions of holders, which can be affected by things totally unrelated to Sun, and like program trading, which can impress general market trends onto individual stocks despite their not being appropriate to company specifics) can have an effect.
In other words, there's no such thing as an 'objective' take that means much. Warren Buffett speaks of "Mr. Market" doing foolish things from time to time. I've been reading a book of his quotations, and one that strikes me as possibly applicable is, "All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies." I sincerely believe Sun is a good company. I personally think this is also a good time, but there's no way to assure a better time isn't coming.
It certainly seems to me that Sun's prospects have improved since September 11, contrary to the indication of the stock price. Telcos still seem to be having problems, but I believe Sun is finding other market opportunities (they mentioned health sciences, data warehousing and some others on the product introduction call a couple of days ago, as I recall).
I can't help wondering whether the price was getting some support from share buybacks by Sun until the end of last month; it seems to me they might concentrate buybacks near the end of a quarter when they have a good feel for the cash available and can best evaluate the impact on earnings per share.
I hope that helps. Let us know your thoughts.
JMHO.
Charles Tutt (SM) |
