I think you all know how much I like Peoplesoft. But just in case: Outstanding company perceived to be an innovator, great growth prospects, taking advantage of the unstoppable trend to packaged architectures and applications (the days of the MIS department partnering with Andersen Consulting, IBM, EDS, etc. to spend 3 years and $300 Million to create a custom in house system are over !).
But the thing that really makes me believe in the company is its ability to attract and retain talent in a competitive environment without having to pay headhunters tons of money, bribes, etc. From everything I hear it is a great place to work and the employees are aligned with management and all are aligned with the shareholders - this is very unique positive energy; it is not something that can be planned, but when it happens - watch out ! The chemistry at Peoplesoft is working.
I have absolutely no reservations about a simple buy-and-hold strategy with Peoplesoft. Buy at whatever the current price is whenever you can afford it and hold it forever, unless something significant changes.
Now with that said, I am uncomfortable in the short term with prices above $60 unless the first quarter numbers come in way ahead of expectations (and by this I mean even more than the standard 15% ahead of the Wall Street published numbers).
For those that are waiting for a dip, I think the best opportunity will be when and if Peoplesoft makes an acquistion in the Customer Interaction area (Vantive, Clarify, or whoever; or maybe a capital budgeting decision to build it in house). The problem with waiting, however, is you might see it go to 65 and pull back to 58. It's very difficult to predict, and I have no basis other than observing the Siebel Scopus deal, which will likely put some pressure on Vantive to evaluate all of its options, but I am betting that an acquisition will happen sooner rather than later - there is no better time to make a stock based acquisition than when the stock is strong. My prediction, for what its worth: 1st quarter numbers will be strong, stock price will climb, an acquisition will be announced, and the stock price will dip 10 or 20%.
If no acquisition is made, then that dip people are waiting for is likely to be small and may not happen.
speculatively yours. Rick. |
