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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (51452)	5/17/2002 4:54:19 PM
From: tinkershaw	Read Replies (1) \| Respond to of 54805

concentrates on the competition between IBM and Microsoft. The latest such article appeared in the last week or two in the Wall Street Journal. Given your analysis, why do we get different information in these newspapers accounts? Lazy reporting; different cut at the industry; something else? I have to agree with Paul here. .Net for MSFT is more of a concept than a true product at this time (albeit MSFT is known for taking its time and cleaning up down the road). But this time it is different. MSFT's .Net is more equivalent to a Chimp product (assuming it takes off). Conventional wisdom is that .Net's addressable market is about 1/3 of the marketplace, as J2EE is the dominant standard, and MSFT is not going to support J2EE. It appears unlikely that .Net will supplant J2EE and move out of its niche of Microsoft shops. So I do think it is lazy reporters writing about names they know, with ticklers from PR people they know. I briefly discussed .Net in part three of my series, but really all one can say at this time is that its MSFT, and the product is still too immature to say much more, other than the conventional wisdom I've cited above. But clearly IBM is doing well in the marketplace, but then again so is BEAS. BEAS just has a much smaller mouth piece. If your a risk adverse Gorilla investor, without question BEAS is not in that category. BEAS is in the category of your earlier acquiring Gorilla investors because BEAS is really the only pure-play company to hold in this basket. From my discount cash flow valuation of BEAS, at a static valuation (assuming BEAS's growth remains at 0% for the rest of the decade) a fair value for BEAS stock based on those cash flows is aroun $5-$6. So BEAS stock price does not reflect much growth expectations at these prices. But just because it might be an intrinsic value now does not necessarily mean it will succeed as the Gorilla. It is just a very exciting company and market to watch. Tinker