Hi Jeff, I am a doctor and this morning bought at ~ 10 AM, ~ 15000 shares
of SGI @ 25 based on this AM's info on the Dow Jones news retrieval.When I
saw 54 cents/sh, @ 25 with forward PE of ?13, growth rate !6%?,
my eyes almost popped out! I have heard Joseph Abbey Cohen reccommend
it in the winter with INTC and MSFT but couldn't get myself to buy it
because I like the horse to be out and running first rather than buy on
a promise.I waited until they deliverd and now it looks that they have.
I was impressed buy the fact that engineers and scientists liked the
machine ( I have no idea how they work, gg )! I am not impressed by
the drop to 12 in April considering that leaders like Cisco went
75--->39, about the same.
Merrill Lynch had a buy on it ( 1-1 opinion ) on it last year and they
really liked it.As of this morning it is still under review but I
suspect they'll come out with a favorable reccomm next week.
Your report is well done and from what I've been reading in Invest Bus
Daily ( Momentum paper ) I agree with you that there was a lot of
media hype. Investors has still missed Newbridge Network's move from
27 to 52, one of the great networking companies and the one most
likely to challenge Cisco in the Lan/Wan arena for ledership.
Any way it does appear cheap,cheap, for now and for the next
12 months at least.
This bull market is in great part due to the coming of computers and
with SGI's ledership in it's field it should do well.I think scalability
is a big plus.Barron's last week run an article about how companies
are trying to stretch buying a computer to every three years instead of
two because of the costs and shrinking Comp margins. Also with the
Year 2000 problem, 2 weeks ago Barron's said that most Comp tech
budgets will go towards fixin y2k problem and not into buying as many
computers. Finally if the Fed raises interest rates in 1-2 years
there will be less money to borrow/spend ad so scalability will be
a plus.
I was 100% in cash until today and had gotten completely out of the
market 10 days ago because I am concerned about the height of this
market and the supervaluation of the leaders at a time when they are
all tainted; MSFT PE 60!with slowing growth, INTC with another flat Quar
ahead, IBM with flatish growth etc., Dell PE 39!!, With MSFT PE of
60 and an S&P PE of 20 that means that you have to wait THREE YEARS!!!
to get your money out of MSFT!! And this is exactly what Mary Farrell
was quoted in INV BUS 2-3 days ago as saying :" MSFT and Dell even at
their current PEs are a good buy if an ivestor is willing to wait 2 years!"
Yeah, I can see the American investor who goes through life in three
minute soundbites, wait three yers for his money.
Unfortunately I believe near term the market will go higher before it drops
because of money pouring in and because Greenspan sounded postive
at least near term ( 1 month ?, gg ). Furthermore, historically
market does well the last and first, 2-3 days of the month which
just so happens to be next week, Tues-->Fri, probably something to
do with people getting their paycheck sending in to Mutual funds
who then have to buy stocks.
So what are the mutuals going to buy on Mon? I think they will look
for value,----> SGI.
I look for SGI to go to 28 -29 next week at which point the graph
indicates some resistance. It may very well go through it and if it
does then we'll slice through to +/- 40.
I believe SGI will continue to go up until we gget the BIG bubble
in this market ( " speculative froth " ) but I don't think we are
there yet; maybe in the next 1-2 months. |
