Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Unisys: Computer Solutions and Services Worldwide -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (2481)	10/15/1999 9:49:00 PM
From: wolfdog2	Read Replies (1) \| Respond to of 2818

Greg, its not the history that counts its the opportunities going forward. To refer to UIS as just another IT company is like referring to IBM as just a box maker. UIS's new management team seems smart and capable. The stock rose because management is paring down debt and increasing earnings. This is a billion dollar company with an international presence. UIS is not, as I'm sure you must be aware, just another software services companies. They also are an OEM with hardware and software products. The software services companies are all selling at low multiples because of the Y2K uncertainty. As we move into the new year, I expect the business and multiples of these companies to expand. I think that we are putting in a bottom here. Wall Street overacted to the revenue shortfall and I fully expect the stock, once to market reaches its bottom, to climb from here. No, I don't expect an early return to the 40's, but if Wall Street is sufficiently impressed with the restructuring due to be announced in the next few weeks that could well happen.

To: Greg Jung who wrote (2481)	10/18/1999 12:12:00 AM
From: DJB	Read Replies (1) \| Respond to of 2818

Hi Greg, >>You quote forward estimates. These are just numbers drawn out of thin air, analysts generally make estimates on the assumption that a model "works".<< For the first 3 quarters of 1999 UIS has earnings of $1.10 per share excluding extraordinary items. Larry Weinbach has stated that he is comfortable with the 4th quarter estimates of $.45 EPS. So for 1999 these are not figures pulled out of the air by analysts. They are numbers confirmed by LW. It is also LW that has stated there will be 15% to 20% bottom line growth in 2000. Since LW has been with the company he has not missed a bottom line projection. Also his revenue projection is 8 to 10% per year. The 3rd quarter had 7% revenue growth before the currency exchange rate problem is taken into consideration. For all of 1999 I believe the revenue growth will be in the 8% range. So if he does miss the revenue it will not be by much. Again these are LW numbers not analysts. Listen to the replay of the conference call. >>OTOH in 1997 this was a $5 stock and my suspicion is that government y2k remediation efforts saved its collective butt. Since then it hasn't earned the amount of money lost in that year, and it should take 5 years at perfect execution to make up for the money lost in 1995,96, and 97.<< Sorry but I fail to see the relevance of this statement. Does a company have to make up past losses before its stock moves up? >>Maybe Unisys is inhabited by super-powerful super-intelligent beings<< With the addition of LW 2 years ago the management of this company has been excellent. Debt has been slashed. Revenue has grown and the EPS has grown at double digit rates. This is not the same company that it was in 1997. >>Join the rest of the software services crowd, which is valued at PE in range of 10-15<< Where do you get this PE range? Unisys is more than a software services company. It provides software solutions to major banks, major airlines, publishing and customized software to many customers. Unisys also provides hardware maintenance support and manufactures and sells hardware. So it is hard to categorizes Unisys as just a software provider. >>my suspicion is that government y2k remediation efforts saved its collective butt.<< This I take is your opinion and not based on fact. The reality is that this is not the case at all. IMHO UIS deserves a PE between 25 and 30. Using the estimate of $1.72 for year 2000 EPS would give us a range of $43 to $52. Dennis

To: Greg Jung who wrote (2481)	10/18/1999 2:47:00 AM
From: Area51	Read Replies (1) \| Respond to of 2818

Thanks for your perspective. It seems to me that there is a good argument that UIS is undervalued relative to their peers. For example: biz.yahoo.com indicates a UIS PEG of about 1.0 (I'll grant you that the 0.38 PEG is an aberration)compares favorably with the industry average PEG of 3.68 or even the SP500 PEG of 2.2. Here's another sort of valuation parameters that would indicate that UIS is undervalued: Message 11617953 When I look at computer software companies (PRGN is my example) I see an average industry PE of 57 and PEG of 3.3. Granted UIS has stumbled in the past and could possibly stumble again in the future. Others would contend that fundamental changes have ocurred (debt reduction, management change) that make the scenario relatively unlikely. Of such differences a market is made. Do you believe that UIS will disappoint going forward? Why?