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Technology Stocks : EDS - Recent pullback a buy opportunity??? -- Ignore unavailable to you. Want to Upgrade?

To: Jolie Renee who wrote (1198)	10/30/1998 1:11:00 AM
From: Daniel G. DeBusschere	Respond to of 1841

EDS expects this year's investment in GM to start paying off- EDS invested big bucks this year in the GM account which will scale back to less than 10% of this rate next year. Previously, EDS stated that this investment was in the $75 million range. If 90% of this is not spent next year then this is a $65 million swing. Also, expected revenue and margin gains from this investment should improve on this amount. The really good news was the statement that GM margins have bottomed and they should start improving with the fourth quarter. Add to this the good growth in non-GM business with the signing of many more deals in the $50 million to $500 million range which yield better margins than the mega deals, the future is looking good. So, the $44 is really not far off the mark when compared with IBM's recent performance. I believe the street has recognized the value of long term service business when compared to the brutal commodity pricing that is being experienced by the hard goods suppliers. IBM and EDS are the undisputed leaders in this market segment. Both have the capability to experience solid growth in revenues and earnings per share consistently over a long period of time. These are long term holdings in my opinion.