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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (48792)	8/27/2000 6:47:36 PM
From: michael97123	Respond to of 74651

The Supreme Court might rule this week I understand. If it goes back to Appeals the stock should rally on that. What did Barrons have to say?

To: Ian@SI who wrote (48792)	8/27/2000 8:23:32 PM
From: Rusty Johnson	Read Replies (1) \| Respond to of 74651

Microsoft's Best Engineering May Be Financial Barron's by Mark Veverka ... maybe it's time to look at Microsoft as two distinct companies. No not in the way that Judge Jackson has decreed, but as a software developer and as an investment company. ... "As their clout decreases, and their monopoly power decreases, their leverage over these upstart tech companies will diminish," says our hedge-fund source, who asked not to be identified. Put another way, Microsoft may still be overvalued at $71 a share. With earnings projected to grow 11% to $1.88 a share in the fiscal year ending next June, and 13% to $2.12 in fiscal 2002, Microsoft may no longer deserve the pricey multiple it carried as the dominant technology stock for more than a decade. "This company is growing in the low teens at best. You're basically paying a multiple of about 40 times [projected] earnings for a company whose prospects are for annual earnings growth of 10%-13%," the bearish hedge-fund analyst asserts. ... What's more, Microsoft is padding its profits by steadily decdreasing the effective tax rate on its books. ... "It's only a matter of time before all of this catches up with them". Some of us have been saying this for some time. Time will tell. I see a 10% upside and a 50% downside to this stock. It does have a loyal following going for it. Subsribe to wsj.com and it includes Barron's Online. Best of luck.