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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (687)	3/6/1999 8:37:00 AM
From: John Carragher	Read Replies (1) \| Respond to of 54805

compuware Gorilla??? per Soundview The Web [has] triggered a tremendous amount of new spending," adds Kris Tuttle, managing director of software research at Soundview Technology Group. Why? There's real money to be made: Around $426 billion in sales will originate on the Internet by 2002, according to the International Data Corporation. And regardless of how many personal computers are sold, Web-based business is booming. That's where some niche software companies come in. Among them are names that played in the Y2K arena, like Compuware, and newer companies that supply security programs for e-commerce. Those include Check Point Software, BEA Systems and Security Dynamics. Compuware, which Tuttle calls "a gorilla" (its market capitalization is nearly $10 billion), makes software for building and testing applications -- including the Internet. "They're moving…into strategic areas, and brought the notion of testing up to the forefront," says Farley. "Meanwhile the company continues to grow [by] 45-50%." And at its current price of 25 7/16, it's more than a third off its 52-week high of 39 1/16. Its P/E of 22 times projected 1999 earnings of $1.15 also makes it reasonable, compared with its expected growth rates for 1999 (34%) and over the long term (35%), according to First Call. (Readers should note, however, that there's been some heavy insider selling at Compuware. From September 1998 to January 1999, six high-level executives, including chief operating officer Joseph Nathan, dumped a total of 631,050 shares. Also, concerns persist about shrinking revenues from some outsourcing contracts.)