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

To: trouthead who wrote (26642)	1/21/2000 10:36:00 PM
From: JC Jaros	Read Replies (1) \| Respond to of 64865

I am invested in SUNW long term, but am concerned with the high valuation. I was expecting a higher earnings number. I kinda was too. That doesn't mean that the performance wasn't there. SUNW has a way of landing on the numbers with precise regularity. Perhaps it's because they give great guidance. They sure have cultivated a nice working relationship with the analysts who follow them. Perhaps we indies are always hoping for the 'blowout' emotionally. SUNW instead keeps it nice and steady for the institutions (which still make up the majority of shareholders). There is nothing of authority written in the gospels of fundamental investing that says high multiples are bad. I listened to the CEO of Boeing once make the case that high multiples were conversely, perhaps a buying signal. There's much more to the SUNW story than a P/E on trailing earnings. If P/E on trailing earnings were so omenous how do you explain the last 12 months? SUNW is the third little pigs house (bricks) and it's become increasingly more so during the time the multiple has increased. We've got accelerating growth that extrapolates reasonably to 35% in the 12 months forward. At this point (right now), SUNW deserves a similar P/E to Cisco (IMO) There is a dynamic of SUNW being at the center of this networking thing; this thing that is absolutely driving this whole economy. We have X amount of dollars wanting to fall in with US equities and in particular, tech equities. Of those, a few equities have classic franchises in an obvious future and a few have 25%+ growth rates, and a few have consistent uninterupted earnings growth. SUNW has it all. What's that worth? -JCJ

To: trouthead who wrote (26642)	1/22/2000 6:06:00 AM
From: JDN	Respond to of 64865

Dear JB: I too have pondered that question. Here is how I have answered it to my satisfaction. 1. There are very few blue chip companies that are strategically placed to implement the Internet revolution. Examples like SUNW, EMC, CSCO. These companies are firmly entrenced and will continue to have major growth into the foreseeable future. Thus they carry a PE ratio which reflects that almost guarantee of success. 2. SUNW IMHO manages its earnings. To me this means it is highly unlikely they will miss a forward target. I have no doubt they could have squeezed out a few more pennies in this qtr. but instead I believe that they prefer to tuck some away to make sure they continue to have ever increasing earnings even if they hit a little bump in the road somewhere. 3. SUNW mentioned something to the effect in their CC that they are building for a much larger organization in the future. Costs money to build up the infrastructure and with a unique system as their own a lot of time goes into training. Example, their Storage System. I doubt they had any meaninful revenue from this area yet, but I think they said they had hired something like 500 people in this area. I think its reasonable to assume that they will in fact get their fair share of this business, especially in their new installations where they will be able to offer turn key installations through and through. Thus, some of that potential profit they COULD have had was invested to create EVEN MORE profits in the future. Those are my thoughts, plenty of knowledgeable people on this thread are welcome to pick them apart or add to them. JDN

To: trouthead who wrote (26642)	1/22/2000 11:07:00 AM
From: Lynn	Read Replies (1) \| Respond to of 64865

Dear JB: Your question makes a Cramer article I found on the QCOM thread a 'must read.' Here's the section that deals with SUNW but first, this part make me think, "Twister," ;> >... there is a tremendous propensity among lower-performing individuals to want to jump off the Sun Micros (SUNW:Nasdaq - news) Okay, here are the sections relevant to SUNW: [quote begin] (Second, there is a tremendous propensity among lower-performing individuals to want to jump off the Sun Micros (SUNW:Nasdaq - news) and the Nortels (NT:NYSE - news) for the next new hot stock. But those who have traditionally done well know that switching horses like that doesn't work. Sure, some stocks will get overlooked that shouldn't, while others might momentarily get too expensive. But it's much easier to invest bird-in-the-hand style than two-in-the-bush style.) Don't be afraid of owning new technologies. The best of you individuals out there are experimenters, looking for a dominant company in a soon-to-be-dominant industry. Many individuals I know spotted Sun Micro long before other professionals because they saw that Sun machines would dominate the New Economy. (Microsoft is the best example of this... Leadership at the top is the most important criterion for finding the best stocks. Investing with Chambers at Cisco or Grove and Barrett at Intel (INTC:Nasdaq - news) or McNealy at Sun or Pittman at AOL (AOL:NYSE - news) or Koogle at Yahoo! (YHOO:Nasdaq - news) has been dead right. A strong hand up top makes all of the difference. (We tend to hate judging subjectives as professional managers. [quote end] Here's the URL to read the entire article: Message 12645687 Lynn