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Technology Stocks : Micron Electronics (MUEI) -- Ignore unavailable to you. Want to Upgrade?

To: Tuan Phan who wrote (2758)	12/31/1997 4:35:00 PM
From: jgercke	Read Replies (1) \| Respond to of 4074

Whether MUEI will be bought out or not, I haven't given up on the company's operations turning around. After all, they made .92 last year, are experiencing 32%+ topline growth, have identified their inventory management & marketing problems, and, it seems to me, are aggressively pursing a lean, mean and focused strategy. Their product mix should improve with the growth in server lines, their costs should improve with better procurement, their G&A should fall back into historical norms, and their government/corporate efforts should start to pay off. They have also been investing in their Japan call center which hopefully will pay off in additional sales. So far Japan's been a drain. The new First Call consensus estimates are for .53 and .93 for FY's 98 & 99. I think (hope) these estimates are low and the result of reactive CYA activity on the part of the analysts. If MUEI can push the top line as well as it has recently, at about 2X the secular growth rate, and improve its production efficiency there is a lot of room, it seems to me, for upside surprises. After all, analysts don't only err on the high side in their work, they err on the low side too. So, what would MUEI be worth if it were going to earn 1.50 in FY 99? As long as the top line is growing and the company operations are improving, there would seem to be a floor under the share price and increasing appeal and value to a potential buyer. I would prefer that MUEI be sold into strength, not out of weakness. My goal for the stock price, reaslistic or not, is 30 in calendar 1999. I'm not saying it's a lock, I'm just saying it's possible, and if operations improve beyond current expectations the future benefits of that will be discounted quickly in the marketplace and the stock should respond heartily. These guys haven't been standing still. They bought NetFrame, have disposed of inventory, sold off MCMS, ditched their contract manufacturer, etc. They are doing something. Sometimes it takes imagination to conceive that something good can happen. Hang in there folks; MUEI's got a lot of naysayers but a great reward/risk profile at this level. Happy NY to all.