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Technology Stocks : All About Sun Microsystems

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To: QwikSand who wrote (15195)	4/6/1999 11:46:00 AM
From: E_K_S	Read Replies (2) of 64865

Hi QwikSand - Unless future sales double next year and the current Price/Sales ratio holds, SUNW's current run may be overstated by the market. There are several announcements regarding new software products that should produce significant free flow cash flows. It appears to me that SUNW's current price is anticipating significant future sales growth that may develop but perhaps not at the rate the current market price suggests. IMO, SUNW probably has moved too far too fast and I anticipate a 10%-15% correction after the split. Therefore I hedged part of my SUNW position today by selling a few of the the October 145 calls for $19 1/8. Sonki's price target this year posted a few days back was around $150-$165. I am still very positive on SUNW's future prospects but I just do not see next year sales doubling from current levels. The AOL deal will add about $500 million next year but I believe this original estimate was based on a muti-year sales agreement. EKS

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