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Technology Stocks : SAP A.G. -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (2628)	9/25/1998 7:29:00 PM
From: growthvalue	Respond to of 3424

From Herb Greenberg's column today on thestreet.com: Baan-Baan, anyone?: The knock on Dutch software giant Baan (BAANF:Nasdaq) used to be that it relied on aggressive accounting to make its numbers. Now it just seems that business stinks. At least that's the word from officials of Technology Solutions (TSCC:Nasdaq), whose business is to install enterprise resource-planning software (for such things as payroll, accounts receivable, human resources, etc.) made by companies like Baan. In a conference call with analysts yesterday, they said the entire market for the so-called ERP software has slowed. But they specifically mentioned Baan, saying that there has been a "noticeable deceleration" in its licenses. If Baan is getting battered, what about its longtime direct rivals, SAP (SAP:NYSE) and Peoplesoft (PSFT:Nasdaq)? They may not be faring much better. Yesterday Credit Suisse First Boston analyst George Gilbert, who had considered himself SAP's biggest booster, downgraded the stock to a hold, saying that "pricing is eroding" faster than had been expected and that "growth is expected to dip" in the second half of the year. With its stock at 60 times earnings, he figures there's simply too much risk. Gilbert pulled the plug on Peoplesoft in July and simply stopped covering Baan long before that. What took him so long on SAP? "I think we've all been in denial for awhile," Gilbert told me yesterday, adding, "I think there's more reality yet to come."

To: LindyBill who wrote (2628)	9/26/1998 12:05:00 AM
From: Mike Buckley	Respond to of 3424

OFF TOPIC Lindy, The "dismal results" this year of the front office stocks is not across the board. The companies that have executed well have a good showing for their stocks for the most part. Those that have not executed well have suffered the typical blips of high-growth companies in an increasingly competitive market. Considering how much the Rusell 2000 small-cap stock index has been deximated, the front office stock problems have been somewhat due to association. I think there are two ways to play the front office stocks over the long term. One is to work with the leaders. Siebel and Remedy are clear leaders in their respective fields, and the latter is I think especially undervalued despite their recent problems. I have owned Siebel awhile and recently bought Remedy. The other way is to work with the companies that are showing very strong execution in their niche. I put Peregrine and Dendrite in that category though I haven't looked closely at the stock valuations lately. Not being a short-term investor, I don't have a clue about short-term strategies. --Mike Buckley