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Technology Stocks : SYNTEL (SYNT) - Upcoming Year 2000 IPO -- Ignore unavailable to you. Want to Upgrade?

To: saief who wrote (1742)	6/2/1998 6:03:00 PM
From: Narotham Reddy	Read Replies (3) \| Respond to of 2761

A Negative Report on Syntel Labor Shortage May Shake Syntel ProFiles, 5/12/98 By Leo Hood, Editor The tightening supply of skilled computer programmers could put a squeeze on staffing-services provider Syntel, opines ProFiles Editor Leo Hood. [.. Syntel history deleted ..] The stock is considerably overvalued even assuming this projected growth materializes on schedule. The company is in a very labor intensive business. Specifically, its future growth depends on attracting and retaining highly skilled IT knowledge workers. Because of the magnitude of the Y2K problem, the available pool is rapidly shrinking and labor costs are escalating. Wall Street values this company at $934 million versus [latest 12 month] revenue of $140 million, for a price/sales ratio of 6.7 earnings of 37 cents per share in the trailing four quarters gives us a current PE of 66, while estimates for earnings of 48 cents for the full year of 1998 and 59 cents for 1999 give us forward P/E ratios of 51 and 42 respectively. With a projected growth rate of 25%, this suggests the stock is presently overvalued. Book value is around $1 per share, giving us a price/book ratio of 21. while we expect the company will continue to enjoy sales and earnings groth through the end of the century, we think the current stock price reflects all the good news to come, and then some. Technically, the stock recently broke through its 50-day moving average and could be headed for the mid-teens over the next quarter or so. It is a short sale in the high 20s to low 30s with a target to cover around $15 to $18 in the next six months". Ram what is your opinion on this blob ? Narotham