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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: George L. Smith who wrote (2724)	10/14/1998 4:38:00 PM
From: Paul Loucks	Respond to of 4509

I believe there will be more weakness in PSFT over the next couple of days (PSFT was weak today on a NASDAQ up day and after crashing yesterday -> not even a dead cat bounce). I know the industry well and have known PSFT for the last 5 years but I have not followed the stock closely. Last night I reviewed the last 500 posts on this board (took 5 hours). Many thanks to people like Michelle, Melissa, Paul, etc. for their informed posts. I am going to buy some PSFT but I think I will wait for Friday. In the near term (3-6 months), I do not think that PSFT will sky rocket. Too many analysts have down-graded the stock. Will the analysts turn around a couple of weeks later and upgrade? I don't think so. I am buying PSFT because they are an excellent company, good revenue and profit growth, gorilla in nature (due to huge switching costs), 2nd only to SAP (lots of bad implementation stories), and now their trailing PE is 34 (reasonable). I must say, if I were PSFT management I would lower analyst expectations for the up-coming quarters. The lower expectations have already been built into the stock price. I think it would be wise to predict 35-40% revenue growth (reasonable results based on their current PE). If PSFT does much better, we can see some future upside surprises in earnings. Finally, I noticed a poster saying that PSFT was going to make acquisitions. I think the logical choice would be Business Objects (~ $250M which PSFT can use cash). This will help Peoplesoft and hurt their competitors at the same time. Any thoughts? Paul L.