I think you're absolutely right about the MSFT court case and the year long pall that came over SUNW valuation. As I recall, there was a direct correlation between the MSFT suit stuff and sudden SUNW stock stagnation.
What's happened since that time perhaps, irrespective of legal wranglings, is that the perceived importance of the outcome of the Java suit to Sun's success by the street has been displaced somewhat by apparent and stellar performance by Sun in the hardware space. They are selling the snot out of servers and workstations across the spectrum (while new product lines like storage are firing up).
I think maybe SUNW has given somewhat better guidance to analysts this orbit because of the tenuous global situation and acute worries about general S&P earnings. I think too that (as much as I like Scotty) Ed Zander has, among other things, given a calming voice to SUNW with respect to institutional investors. Based on the volume lately, it appears as if there is some sort of flight afoot into SUNW quality, although like most everyone else here, I've been wrong before in that regard.
I have one half of most portfolios (several family trust ports) in my charge, invested in SUNW at an average cost of $23-$24 (a bonafide s**tload <g>). I've managed to avoid the many temptations to 'trade' on SUNW's oft predictable price swings over these few years. Having seen several otherwise right minded investors on this thread thrown from the SUNW ride altogether by a single miscalculation, my fervor toward 'buy and hold' has grown stronger exponentially.
I have though seen 'TA' seemingly call SUNW 'breakouts' more often than not correctly. Based on the volume, and the 'up' Friday, it sure smells like a quick march to $60 to earnings release (God, I hope that didn't jinx it).
I think there is good reason to expect the PE to drift up to the 25-30 range going forward. The supply of global companies firing on all cylinders like SUNW, is likely to shrink dramatically over the next several quarters. Given a rather LARGE amount of CASH needing certain lodging in US equities, it is reasonable to expect that the money is about to (finally) reward the quality of SUNW.
I'm thinking $70+ by calendar '98 year-end (before the split). :)
JMO,
JOhn
|
