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

To: Beachbumm who wrote (7876)	2/23/1998 5:02:00 PM
From: Charles Tutt	Read Replies (1) \| Respond to of 64865

Well, I hope it is a contrary indicator. However, I share your concern. IMHO MSFT is a bubble which may eventually burst, and the bigger it gets before that happens, the more ferocious the event. Such an event could easily inflict collateral damage on the entire stock market, including Sun. Alternatively, the aura may merely quietly shift over time to Sun, IBM, or another. I think MSFT's market cap already exceeds its book value by over $150 Billion, and its revenues are similar in magnitude to Sun's. For perspective, if the world's population is 5 Billion, then $150 B is about $30/person. I think the number of PC's sold each year is well less than 100 million, so MSFT's market capitalization also calculates out to more than $1500/annual PC sale. If most of those PC's are used (as I suspect) as little more than communicating typewriters, then such a valuation is staggering. MSFT is under increasing fire from the government, as well as its customers and competitors. Relatively attractive alternatives are beginning to appear as well, IMHO, in the form of NC's. I'd be happy (make that elated) if Sun had a market cap half as large as that enjoyed by Microsoft. We live in interesting times. JMHO.

To: Beachbumm who wrote (7876)	2/23/1998 9:11:00 PM
From: Carl Wysocki	Read Replies (2) \| Respond to of 64865

Beachbum, I take this as a contrary indicator, especially since some are throwing in the towel based on market perception rather than fundamentals, altho' it sounds like Addi is also trying to diversify his portfolio. I think this great bull market of the last 3 years has begun to spoil us-- I know I have to resist the temptation to demand 25% returns every quarter. Sun is currently trading at 22 times trailing earnings, which translates into about 18x forward 12 months--below (I believe) the S&P which has a long term growth rate projection of somewhere around 6-8% vs 18% for Sun. Sounds like a value play to me, if you believe Sun can sustain 18%. But, one has to be patient, because the Street has always had a love/hate relationship with this stock, and will probably continue to do so. This creates volatility, which, it would seem, many people don't like. My personal valuation model for Sun is 22x trailing earnings (where it is today), plus or minus 4x , and this reflects the general market conditions today. As I mentioned before, I believe this is a slight discount to the S&P, which, in my mind, arises because of Sun's relatively weak odd quarter's performance, followed by relatively strong even quarters. I'm sure the analysts hate to think out beyond 3 months, so they downgrade the stock. I'm sure everyone agrees that most of them are idiots, influential as they may be. But, over the long term, they are just noise in the system. Personally, I believe Sun will continue to grow the top line in the 18-20% range, with quarterly variations. Gross margins will continue to grow in the foreseeable future as the server business continues it's decent level of growth. They will probably plow any Java related growth back into the business, and I don't believe any of the potential Java upside is reflected in the current price (a lot got in there when the stock traded at 53). If someone's looking for a steady growth stock, with minor fluctuations, this ain't the place to be. If one is satisfied with 25-30% p.a. for the next few years, with significant upside/downside moves, this is the place to be. On a related note, if you write options, volatility can be you friend. Carl

To: Beachbumm who wrote (7876)	3/2/1998 2:02:00 PM
From: harrypolo	Read Replies (1) \| Respond to of 64865

Addi, Kal, Chen, you were the point men on Sun. I followed your postings zealously, especially you Addi. I bought, sold, bought, sold again and again...only to see Sun languish, seemingly eclipsed forever by WINTEL. I was looking for the next Microsoft and Intel...and then one day a wise man posted something on this thread that cleared my thinking. He said, "instead of looking for the NEXT Microsoft, why not buy the one that's here now?" or something to that effect. I haven't bought Microsoft yet, but several months ago I did sell all my Sun at 49. Still...with all of us throwing in the towel, maybe we have seen a bottom. But I really doubt it. Good luck to you all. Regards, Harry