Tuesday, January 13, 2009

Hot Stock Tip?

Is "Sybase" a hot stock tip?

A long-term investor might regard cash-under-the-mattress a better choice than SY ...no splits, no dividends, and after the Client Server Fun Times of the early 1990s, a price history not unlike army life: months of stifling boredom punctuated by moments of sheer terror.

But... in the short term... maybe Sybase looks good. Richard Moroney at Forbes.com certainly thinks so:

Unlike most U.S. companies, Sybase (nyse: SY - news - people) has seen its consensus profit estimates for both 2008 and 2009 climb in the past two months. The 2008 consensus profit, at $2.03 per share, falls in the middle of Sybase's guidance and represents growth of 20%. Wall Street expects profits to rise 6% in 2009, to $2.16 per share. Even based on the low estimate for 2009, $1.95, the stock appears cheap relative to historical norms. The company will offer 2009 guidance this month.

The company is capitalizing on growth in wireless data. For example, more managers are using mobile devices to access their desktops and make business decisions off-site, and Sybase remains at the forefront of this technology. Customers in the financial sector make up 20% of sales, but Sybase says their impact on operations has been minor. However, overlapping revenue from merging companies could potentially lower volume. Sybase, with more cash than long-term debt, is a "best buy."

No comments: