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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (23993)	12/4/1999 3:06:00 PM
From: cfimx	Respond to of 64865

price to sales is a function of both growth and profitability. MSFT has a higher price to sales ratio than sun.com because it is a much more profitable company. msft brings much more of each sales dollar to the bottom line, and closer to investors pockets, than does sun.com. Consequently, investors are willing to pay a higher MULTIPLE of sales for msft. if you beilive that sun.com can become a much more profitable company, then the price to sales ratio could expand if sun.com delivers.

To: Lynn who wrote (23993)	12/5/1999 5:39:00 AM
From: JDN	Read Replies (1) \| Respond to of 64865

Dear Lynn: I really have no comment of substance except to say MSFT IMHO is not comparable to SUNW. Since, to my knowledge, SUNW derives no significant direct revenue from JAVA their products are not comparable in the least. Ie SUNW hardware oriented MSFT software oriented. By its very nature the ratios of each not comparable. Personally, I cannot think of ANY company that is comparable to SUNW. HP, CPQ, IBM have servers but only SUNW has commands the top level of devices and only SUNW has the POTENTIAL that JAVA offers down the road in powering a multitude of small devices. I am no expert and anyone who disagrees feel free to state their thoughts. But for myself, if I HAD to compare SUNW to someone I think I would pick EMC, only because both have outstanding products, hardware oriented in their field. What would you find there? JDN

To: Lynn who wrote (23993)	12/5/1999 3:24:00 PM
From: fuzzymath	Read Replies (1) \| Respond to of 64865

Price/sales valuation worries some professionals, who consider it a convenient means to ignore the fact that many stocks have a ridiculously high P/E ratio (at least compared with prior market history). [There was an article in the WSJ about this recently.] I would expect ML (assuming you mean Merrill-Lynch) to take the more conservative, traditional route of using PE. SUNW is a really unique company. In the past they basically competed with the other Unix workstation manufacturers (HP, Silicon Graphics, IBM, etc.)--and that's what they were, a manufacturer of UNIX hardware. But then maybe 4-5 years ago the entire UNIX world was beginning to feel threatened by the increased power and substantially reduced pricing of PCs. Intel's new CPUs could now match the performance of lower-end UNIX machines, at a lower (and falling) price. The threat at the hardware level was matched by Microsoft's threat at the operating system and software level. Does anyone know of any good UNIX word processors? Anyway--Sun changed. Since that time they have moved to the forefront and, along with Oracle, have challenged Microsoft's domination. To me, looking at all of this in retrospect, it was a brilliant move to embrace the web, invent Java (which Microsoft vowed to "embrace, alter, then discard"), and they're continuing today. So, it's difficult for me to compare SUNW to any other company -- which makes it hard to compare statistics like Price/Sales and PE. Maybe IBM is the closest now, in it's innovation with XML and other very new technologies. But IBM is a behemoth that's trying to learn to leap, while Sun has already proven itself to be quite the ballerina. HP is dividing itself into parts -- I like their products (I've worked with lots of them and bought lots), but somehow they've never gotten it all to work together seamlessly (scientific instruments, PCs, UNIX machines, laser printers, etc.). And HP is not a big player in the innovation that's happening right now (XML, Java, etc.). As for the others: MSFT is only software, INTC is only hardware. In a way, though, MSFT is where the battle of influence is occuring. But Sun doesn't make it's money by winning the battle of influence with MSFT. It makes money from selling UNIX machines. So, enter enemies HP and IBM. So -- I've ended up telling you nothing of what you asked! SUNW is a unique company that is trying to influence the future, in major part to ensure its own survival. Who would have thought DEC (always the #2 hardware firm, after IBM) would meet the demise it met? SUNW is much smaller than DEC and its influence and its hold on the marketplace much smaller than DEC's was at one time. My feeling is that Microsoft is stumbling, and SUN has invested so much in influencing where we are today and where the Internet and software development are going, that it is likely to be the primary beneficiary of the move from the desktop to the net (see a really great report in the Interactive WSJ from November 15). So--no help on Price/Sales analysis (sorry). But for now (through January at least due to January Effect) and probably much of next year I think SUNW and all computer manufacturers will do well (too many companies and US Govt have postponed hardware upgrades due to Y2K fears). And I think SUNW is the leanest, nimblest, and craftiest (while being "nice") of the companies you mention, which (if I'm right) bodes very well for the longer term. Thanks for requesting my response!