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Technology Stocks : Gateway (GTW)
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To: Oeconomicus who wrote (5521)3/7/1998 9:24:00 AM
From: yard_man  Read Replies (1) of 8002
 
Don't hate 'em just think the current stock prices are due for an adjustment. Other stock valuations that seem high to me: AOL, YHOO, MU and most of the large cap stocks.

Did I say fewer machines? Scratch that. Not saying fewer machines will be sold any time soon, but definitely less revenues.

Of course, you're right, PC prices have been declining since the whole thing began. However, the typical business machine (as more and more power has been added) has hovered around the 2,000 - 2,500 range for the last few years until recently. If overall revenues are shrinking, then growth in numbers sold is not keeping pace with price declines.
How likely in that scenario is it that margins will stay flat or increase?

I believe GTW could see mid-20's this year. Better to simply sell the stock if you think it's goin down or buy cheap puts to protect yourself against surprises if you don't -- selling the calls means you miss the upside potential, if somehow GTW comes close to meeting estimates.
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