Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: IceShark who wrote (5088)	12/19/1997 2:49:00 PM
From: TLindt	Read Replies (1) \| Respond to of 8002

You are all welcome.... Gateway 2000 Up 7.9%; Put On Prudential's Best Idea List By Sean Davis NEW YORK (Dow Jones)--Gateway 2000 Inc. (GTW) gained 7.9%, tacking against the prevailing wind of the broader market, after Prudential Securities put the stock on its "Single Best Idea" list. Daniel R. Kunstler of J.P. Morgan Securities said the Prudential mention was helping Gateway, adding that the computer-maker's fourth quarter was shaping up as "decent." That would be an improvement on Gateway's third quarter, in which it had marginal operating profits and a gross margin of 13%, down from 18.6% the year before. Growing confidence among analysts about Gateway's fourth quarter may be helping the stock, which has been following an upward trend this month, including a 1.9% rise Thursday. Analysts, including Kunstler - who rates Gateway market perform - do have some concerns about the company. These include Gateway's attempt to move beyond the consumer market, where it's strong, and sell to the corporate market. The effort to sell to businesses didn't get out of the gate as fast as planned, contributing to the shrinking gross margin in the third quarter. "There are some issues longer-term," said Kuntsler, "but the quarter doesn't look bad." Jeffrey B. Baker, an analyst at Principal Financial Securities Inc. in Dallas, said the strength of holiday-season consumer buying should carry Gateway through the fourth quarter. And he adds that Gateway's new country stores - showrooms where buyers can drop in and order computers instead of purchasing them over the telephone - have shown some promise. But investors should be cautious about the first quarter, Baker said. "They're still trying to make headway into the corporate market, and it remains to be seen whether they'll have success doing that," Baker said. Friday, Gateway was trading at 32 5/8, up 2 1/2, or 7.9% on volume of about 3 million shares. Average volume is 2.1 million shares. Gateway's rival in the computer direct-selling business, Dell Computer Corp. (DELL), was down 3.6% to 77 7/8, and Compaq Computer Corp. (CPQ), which also builds PCs to order, was down 0.9% to 53 9/16. The broader market, meanwhile, was down, with the Dow Jones Industrial Average recently off 100 points and the Nasdaq Composite Index, which is laden with technology issues, recently off 10 points. Sean Davis; 201-938-5400 "Dow Jones News Service" "Copyright(c) 1997, Dow Jones & Company, Inc."