PSFT - 1997 Outlook [closed thread] Message Board

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Technology Stocks : PSFT - 1997 Outlook [closed thread]

PSFT 0.0001000

0.0%

Oct 29 5:00 PM EST

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To: Melissa McAuliffe who wrote (713)	1/13/1998 12:50:00 PM
From: Rick	Read Replies (2) of 940

PSFT analysis (for what its worth): The company has tremendous momentum in a lucrative and growing market. It has solid products. It has a strong reputation for customer service. Once a customer selects its products, it is a long term commitment (i.e. revenue stream). Its employees are highly motivated and seem to enjoy working for the company. They seem very well positioned to continue to grow revenues and earnings rapidly. The relatively high current P-E is justified based on future prospects. 1) The run-up to 39 at the end of '97 may have been partly due to short sellers re-reading the tea leaves and covering their asses. It may also have been astute investors anticipating good news in the form of new high-profile clients (GM has been rumored, any comments or knowledge ?) and solid earnings. 2) The return to the low 30's may be due to the "artificial" short covering run-up or perhaps, with the split, there are now a ton of new shares out there and people with large gains simply waited until 1998 to take some profits. Perhaps some of the newly rich 'softies decided it was time to sell some stock to buy a home. Clearly, the Asia thing and tech earnings jitters are responsible for some of the downside. 3) Assuming the earnings come in as expected (which for peoplesoft is usually about 15% above published expectations), the stock will likely trend back up to the 40 range. If we also get some additional good news such as a high profile customer announcement, 45 seems attainable. 4) Peoplesoft seems to be in the process of transitioning from simply a software success story to Power Player in ERP solutions. 5) I can think of lots of good reasons to buy this stock and no good reasons to sell it (other than,perhaps, fear of global calamity which would simply create a buying opportunity for PSFT. Since this is unpredictible I will sit tight.) Does anyone have any info regarding the GM rumour ? Cheers.

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