I know this is a bit dated, but may remind us why we bought PeopleSoft:
Riley Capital Research Issues Strong Trading Buy on
PeopleSoft Inc.
Business Wire - July 23, 1998 14:02
HOUSTON--(BUSINESS WIRE)--July 23, 1998--Riley Capital Research announces that it has
issued a "Strong Trading Buy" rating on shares of PeopleSoft Inc. (NASDAQ:PSFT).
"PeopleSoft reported yet another stellar quarter late Tuesday and forecast revenue growth of 60
to 65% for the full year. We feel that the company's shares have been unduly punished by
investors worried about the slight easing of the company's phenomenal growth rate, short-term
transitional issues, competition in the enterprise resource planning industry, and company specific
problems at competitor Computer Associates (NYSE:CA)," says Mr. Louis Riley, principal of Riley
Capital Research. "The fact remains that there are very few established and profitable companies
that are capable of consistently generating revenue and earnings growth at the torrid pace set by
PeopleSoft."
"We think that the 20% drop in the company's shares since the July 8 close presents an excellent
entry point for short-term traders, as well as an excellent buying opportunity for long-term
investors. On a technical basis we expect the large gap on the daily chart between $46 1/4 and
$42 3/4 to be completely filled in short order, followed by a move back above $50. Longer term we
expect the stock will eventually trade back to its previous peak forward P/E multiple of more than
70X, implying a price in the mid $60 range. The company's shares are presently trading at their
lowest forward P/E multiple since their January 26, 1998 closing low, a time period that coincided
with a significant price bottom in the Nasdaq Composite Index."
"The company is well covered by some of Wall Street's best and brightest sell-side analysts, all of
whom maintained their ratings after Tuesday's report. One analyst even raised his 1999 earnings
estimate. We expect Wall Street's strong sponsorship of the company to continue."
Riley Capital Research is a research boutique that specializes in highlighting investment
opportunities that have frequently been overlooked by most investors and that are not followed by
the majority of Wall Street sell-side research organizations. Some of the firms' recent
recommendations have included Zapata Corp. (NYSE:ZAP) at $20 1/2 on July 15, and
Egghead.com (NASDAQ:EGGS) at $15 1/2 on July 9.
This report contains information obtained from sources which we believe to be reliable, but its
accuracy is not guaranteed. Certain matters described in this report are forward-looking
statements and are subject to risks and uncertainties that could cause actual results to differ
materially from those projected. Opinions expressed are subject to change without notice. This
report should not be construed as a solicitation or offer of any kind. Neither Riley Capital
Research nor any of its affiliates received any compensation of any kind for the opinions
expressed herein. Mr. Riley and affiliates of Riley Capital Research currently hold positions
consistent with the above rating.
CONTACT: Riley Capital Research
Louis Riley, 281/996-1742 |
