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

To: JC Jaros who wrote (26665)	1/23/2000 4:59:00 PM
From: Original Mad Dog	Read Replies (2) \| Respond to of 64865

What's important is that if the SUNW P/E were to suddenly BE the same as CSCO's, one shouldn't get too excited over the high multiple. We're in that magic franchise space. We're in an increasingly server centric world with the #1 branded spot (and growing). I forget how many consecutive quarters of growth SUNW has turned in. The SUNW earnings growth exceeds that of CSCO. CSCO sprung out of Stanford with SUNW but jumped out in front. SUNW has caught up. Sun is truly a quality, innovative company positioned at the blue chip center of perhaps the largest growth market in history. There's no reason for SUNW not to have one of the highest P/E ratios on the S&P. Other than the facts that they are both great companies and both have been successful in supplying the Internet with infrastructure, I don't see the reason to compare the two companies' PE's or speculate about their equivalence. SUNW looks a lot more like a younger, leaner, more aggressive and visionary version of the old IBM than it looks like CSCO. Without CSCO, there would be no Internet as we know it; without SUNW, people would go elsewhere for their servers and related stuff. So I don't think the "PE's should be equal" argument rings true. And you should remember: PE's can equalize in two ways, not one. If CSCO's PE is 197 now, will it still be around 200 in a couple of years? Maybe these two companies will both trade at 100 times trailing earnings in a couple of years, not 200. One should be careful about making assumptions based on the present state of the market. JMHO, I am a big believer in SUNW as a LT investment, MAD DOG