To: RGrey who wrote (2887 ) 1/6/1999 2:40:00 AM From: mauser96 Read Replies (2) | Respond to
Some more clarification about the SAP news. They hired 6500 new employees in 1998, which might be a big factor in the discrepancy between sales growth and profit growth. Presumably these new employees will become productive with time. Sales were up 40% in Europe and 50% in the USA. Management expects 1999 profits to be up 20 to 25%, and they think the goal of doubling revenue over the next 3 years is achievable. Technically SAP is very close to the October bottom , so there is support near this level. Also the stock closed above it's daily low. Most of the "bad" news is already priced into the stock. I put the "bad" in quotes because careful reading of the news shows plenty of bright spots. I think I will keep my shares unless this support is decisively broken. I believe that the worries over Y2K spending substantially reducing ERP software sales have been shown to be wrong, and in any case we are past the peak of Y2K spending already. I may even buy a bit more SAP, especially if we get a successful retest of the bottom. Any regrets about not having sold when SAP was at 50 have no bearing on what actions you should take at it's present price. Time and the market work forwards, not backwards.
