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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: Trader Dave who wrote (2889)	7/6/1999 10:57:00 AM
From: Amsterdam	Read Replies (1) \| Respond to of 6974

First time I've seen an outright sell from an analyst on a fundamentally good company in a long time. Yet, all his comments ring true. His track record may be poor, but even poor ones get it right once in a while. Two weeks before earnings...ouch. I'm sure Tom is going ballistic with lava coming out of his ears.

To: Trader Dave who wrote (2889)	7/6/1999 12:41:00 PM
From: Albert Youssef	Respond to of 6974

Well, he's certainly drawn his line in the sand. Either he'll come out an idiot or a genius. Some of the points he raises do bear looking at, but his prior record on SEBL has been overly pessimistic, to say the least. Time will tell.

To: Trader Dave who wrote (2889)	7/6/1999 3:17:00 PM
From: mauser96	Read Replies (1) \| Respond to of 6974

Duh... point #1) Cannibalization in a tech company is good not bad. If you don't try to make your product obsolete somebody else will. point #2)Already covered in another post point #3)I'm so bored with hearing how the Internet changes everything. Analysts mention it with every post because they think it makes them look up to date and cool. Well it probably will change everything in the long run, but we will have plenty of time to make money before then. The present www is to slow and unreliable for critical apps, and it's not getting any better. (More popular,yes- better or faster,no.) point #4) I'm glad they went outside, following the old rule that the smartest people always work somewhere else. Incestuous relationships are not good even inside a corporation <gg>> point #5) I'm less sure on this one. If options were counted correctly, most software companies wouldn't be earning money. However it doesn't do an investor much good to value tech companies in a radically different way than the market, unless he has compelling evidence that the mountain is going to come to him. In the real world it's more likely you will have to go to the mountain. Of course it may turn out that he is right, but it sure won't be on the basis of his deductive powers. Also keep in mind that analysts have lots of responsibilities to differing clients. People like us who read these reports for free get them last and aren't part of the analysts province...

To: Trader Dave who wrote (2889)	7/7/1999 7:05:00 PM
From: Beltropolis Boy	Respond to of 6974

>Ever watch an analyst commit career suicide? Ben Rose has been more wildly wrong on software stocks than any analyst out there ...< wow. he even managed to garner a wee bit o' press. when he leaps, i hope he doesn't hit my fave corner burrito cart. <vbg> ----- July 7, 1999 2:27pm 2HRS2GO: Siebel sinks beneath downgrade By Sergio G. Non ZDII Give Adams, Harkness & Hill's enterprise software analysts credit for brazenness. Among 15 brokerage firms polled by Zack's Investment Research, all but one recommend front office software vendor Siebel Systems Inc. (Nasdaq: SEBL) as a some sort of buy, with nine of them maintaining the equivalent of "strong buy" ratings on the stock. The appeal is obvious: the share price has multiplied more than eight times on a split-adjusted basis, since the company went public three years ago; earnings and revenue growth has been historically strong, including year-over-year increases of 80 percent for the top line and 119 percent for the bottom in the first quarter. It takes nerves to go against that kind of current, but Adams Harkness & Hill's Benjamin Rose and Kevin Wagner have been doing that all year with Siebel. The analysts downgraded the company to "market perform" in January, and this week actually slapped a rare "sell" rating on the stock. The move has dampened enthusiasm for Siebel shares, which gained just 1/8 yesterday on a day when the overall technology market did very well, and so far today have retreated more than 7 percent. Rose and Wagner believe Siebel's sales, marketing and customer service applications face difficult competition from much cheaper alternatives that offer almost as much functionality. And Siebel's earnings aren't as rosy as they seem on paper, the analysts say, noting that despite $40 million in recorded net income over the last two quarters, no cash has been generated. That could indicate the company is dealing more heavily in "barter transactions" in which service partners also act as customers, with the two sides exchanging products and services rather than money. And Siebel's reliance on its top 10 customers has grown. Other points asserted by the analysts: -- Siebel's margins are falling because the company is getting more revenue from services. -- Growth of the Internet will force Siebel to spend a lot of money buying e-commerce technology. -- Management is thin, as indicated by the recent hiring of at least four new executives. The analysis not only goes against Wall Street's views on Siebel, but also goes against technology analysts' general tendency to give their companies the benefit of the doubt, in the absence of any negative history. You could describe Adams, Harkness & Hill's call as a pre-emptive strike against future letdowns. It also goes against every public assertion of the company. Siebel executives -- such as chief operating officer Patricia House in a recent interview with ZDII -- routinely dismiss competitors as being almost non-existent. The company says earnings and margins growth will continue to be satisfactory. It doesn't expect any major acquisitions, and says its product line is well-suited for the Internet. And you can safely assume that management doesn't consider itself thin. At the very least, Rose and Wagner lack faith in Siebel's ability to justify its current market value, which remains relatively high, even with today's pullback. But as much as you might doubt Siebel's self-promotion, Rose and Wagner's assertions ask investors to make a similar leap, just in the other direction. Considering Siebel's success in developing its own technology so far, no one can say for sure that the company will suddenly have to make a major acquisition to get into e-commerce technology. And with its traditional aggressiveness, Siebel has the sales force to protect its leading-by-a-wide-margin market share. Certainly other companies have done it, including companies with more unpredictable histories, such as Oracle. Even at its current valuation -- name one market leader that isn't high priced -- Siebel has a track record that commands respect. But on the heels of a provocative research report, the stock isn't getting it right now.