Hi skeeter, sorry to take so long to respond. Your data is indeed interesting. MUEI has its own problems, and not much market share, so it doesn't prove much. The price cuts don't tell me anything one way or the other since prices are always going down for computers, plus HWP and Toshiba are not exactly running on thin margins.
GTW is more interesting, but the bulk of their sales are to consumers, I think, though I think they also sell well to small business. Thus if my theory is correct they should see big sales in mid-99, not now. Ingram I don't follow so I can't comment on their market. I gather it is mostly retail, so I again would expect increases next year. Inacom is another that I don't follow, but if it is the largest corporate pc reseller that doesn't indicate surges in demand for corporate PCs, which according to my theory should precede the small business and consumer demand.
Nevertheless, DELL and CPQ stocks are very strong, along with IBM, SUNW, and UIS. Presumably this indicates that business is good from these companies. Overall chip sales are up, and memory prices are still reasonably strong, and certainly were strong last quarter. This indicates that some people are doing well, while others are not.
Your evidence certainly does not show any indication of massive demands for hardware related to Y2K, but at this point business prospects for MU appear to be in pretty good shape, especially compared to where they were. So where does MU stock belong? Certainly not in the teens or 20's where it was when its very survival was in doubt. There is no doubt now about whether it will be a survivor, or even whether it will be a leader. Certainly the stock also doesn't belong at 200 either, or even 100. I guess I'd expect that after a January rally to maybe 60, if memory prices take a turn for the worse the stock will fall back to the low 40's or so. But now that we are in FY99 the stock will certainly be trading based on leading PE multiples based on FY2000 where they are estimated to make $2 or so. Thus I expect the traditional trading range of 20 to 40 to move up to a new trading range of 40 to 60.
Carl |
