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Technology Stocks : All About Sun Microsystems
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To: uu who wrote (5966)12/4/1997 6:54:00 PM
From: Fred Ayres  Read Replies (3) of 64865
 
Sounds to me like people are throwig out numbers at will. What basis do you have for a price like $150? If we assume a PE of 20, which seems to be the norm in this market SUNW would need earnings of $7.5 for the year! Estimates for 98 are $2.25 and for 99 the estimate is $2.71. Simplistically, using a PE of 20 and 98 earning estimates I get $45 as the stock price valuation. For 99 estimates I get a valuation of $54. If SUNW can grow earnings at a faster rate then these numbers can be revised. Perhaps buying at these levels is a good idea. If the stock runs up to $51 or $52 early next year then buy PUTS to lock in gains. If you still feel SUNW will make it to $150 by 1999, why not consider some LEAPS and control the equivalent stock at a fraction of the cost?

Thoughts?

Fred
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