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Technology Stocks : Micron Electronics (MUEI) -- Ignore unavailable to you. Want to Upgrade?

To: Captain Jack who wrote (3975)	10/3/1999 10:40:00 PM
From: DanZ	Read Replies (2) \| Respond to of 4074

Captain Jack, WS only wants to value the core A few analysts might think this, but I think they just created a very good buying opportunity for MUEI. In a September 28 research report, Merrill Lynch said that Micron Electronics would have only earned 6 cents per share if you took out their SpecTek chip unit. Gee, that's a real smart way to value a company. It just so happens that the SpecTek chip unit is part of the company and deserves more than zero value. It's funny that MLCO was buying thousands of shares of MUEI at 10 1/8 and 10 3/16 last week just after they released their report. Smith Barney also reiterated their neutral rating and reduced their FY 00 estimate from $0.66 to $0.56 to reflect lower than expected PC revenue. Fine. What if they are right about PC sales but chip sales make up the difference plus some like last quarter? The general consensus seems to be that analysts are leery about the long term outlook for chip prices and they don't think investors will pay the same multiple for earnings from chips as earnings from PCs. This may be true, but the multiple is more than zero and I find Merrill's comments particularly misleading. I personally think that some analysts are trying to save face for being so wrong on MUEI's earnings, so they dissected the report and accentuated the negative, or tried to find something negative so they would look right even though they were wrong. They hardly mentioned that margins on PC sales were higher than their estimates as well. The stock has a lot of chart support between 9 1/2 and 10, and it held there last week despite what many would consider negative comments from analysts. I think this is bullish short term because it probably means that all the bad news is already discounted. I'm in at an average price of 10.6 and plan to add more tomorrow. My short term target is 12 1/2 to 13. Luck to all, Dan