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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Walter in HK who wrote (15515)	4/16/1999 10:10:00 PM
From: Rusty Johnson	Read Replies (2) \| Respond to of 64865

Perception is reality in the market ... and the conventional "wisdom" is that companies will spend less ... blah, blah, blah ... because of Y2K. I call "BULLSHIT" on that. If your company's Y2K problems aren't solved by now ... you've got BIGGER problems than Y2K. There isn't a lot of original thought on the Wall Street. Of course the sun may not rise and the world COULD end. Here's a take from SmartMoney: Sun Microsystems (SUNW) NEWS Sun Microsystems reported fiscal third-quarter earnings that met analysts' expectations (adjusted for its 2-for-1 stock split) after the bell Thursday. But it didn't get to enjoy the euphoria. Friday, Merrill Lynch analyst Steve Milunovich downgraded his rating on Sun to Accumulate from Buy, based on valuation concerns. "We love the company," he wrote in his report. "But we can only like the stock at this valuation level." The enterprise-systems company has tripled in the last seven months, he noted. "Sun sells at 150% to 200% of the P/E of IBM (IBM), H-P (HP), Lexmark (LXK) and Xerox (XRX), which is pushing the envelope," he reported. "Sun's P/E to growth ratio of 1.7 is the highest in the group." Last week, the analyst noted that Sun was trading like an Internet stock. This week he's reigning it in, before its wings melt, as it were, to hardware's more modest trading levels. "We would get more positive at a lower price or later time," Milunovich wrote. He raised his fiscal year 1999 estimate slightly to $11.7 billion in revenue, or $1.41 per share, from $11.6 billion, or $1.40 per share. For fiscal year 2000 he expects $14.0 billion, or $1.70 per share. High valuation may not be the only weight dragging Sun Microsystems down: There are investors' and consumers' Y2K concerns, which are slowing down software sales. "There are uncertainties to face in the next nine months," analyst Richard Chu of SG Cowen Securities notes. "But Y2K is a one-time concern by definition. It doesn't change the company's fundamentals. No one will worry about it this time next year." Wu says he won't change his estimates and was pleased with Sun's report Thursday. "We could all sign a pact saying we won't care about Y2K's one-time impact on an industry, but no one will sign that pact." smartmoney.com Some Y2K propaganda from the SUNW website: search.sun.com The only sure bets are death, taxes and the wife's incessant nagging. (Please no cards or letters. I admit I'm a pig ... well, "pig-like" as my friend says.) All I know is that the Y2K excuse is history come January 1, 1900. (Look at the bright side ... we'll all be much younger.) Then it will be the lutefisk shortage problem. Y2Little Lutefisk? And the SUNW will rise ...