Stock: Sun Microsystems - What do you think?

[Night201]

It's so cheap. Like $3.xx/share. I think I might buy some next week. Opinions & thoughts about Sun...

 

[ElFenix]

the good thing about cheap shares is that round lots are cheap. and if you lose, its only $300

 

[dullard]

Everytime this thread comes up I say the same thing. Sun is slow, expensive, and one more thing your employees need to know how to run and fix. Thus Sun has really no chance of getting new customers anytime soon. Their current customers don't seem too enthused either. So with each thread I say I wouldn't buy it. Over the years Sun's stock has declined slowly to match my thoughts.

So ask yourself do you really think the new Ultra Sparc IIIi will suddenly make a desireable product? If yes, put your money where your mouth is. If not, then don't. I'm not convinced their upcoming chips will suddenly be fast, cheap, and easy to use and fix...

Think about its new competition: Intel and AMD. The Itanium 2 will start selling (at major OEMs) any day now. The AMD Hammer will be out in April. I don't jump into a company that will suddenly have much more competition.

 

[Night201]

Originally posted by: dullard
Everytime this thread comes up I say the same thing. Sun is slow, expensive, and one more thing your employees need to know how to run and fix. Thus Sun has really no chance of getting new customers anytime soon. Their current customers don't seem too enthused either. So with each thread I say I wouldn't buy it. Over the years Sun's stock has declined slowly to match my thoughts. So ask yourself do you really think the new Ultra Sparc IIIi will suddenly make a desireable product? If yes, put your money where your mouth is. If not, then don't. I'm not convinced their upcoming chips will suddenly be fast, cheap, and easy to use and fix... Think about its new competition: Intel and AMD. The Itanium 2 will start selling (at major OEMs) any day now. The AMD Hammer will be out in April. I don't jump into a company that will suddenly have much more competition.

Good points. So what do you think about getting AMD then. I currently own Intel right now. I've been on the fence about AMD. Probably wouldn't hurt to get a few shares.

 

[imported_Tomato]

Don't do it.

 

[ggavinmoss]

You sound to be interested because the stock is cheap, not because you believe the company is well managed (which it doesn't appear to be) or that it puts out good products (which it doesn't, in my opinion).

If you want cheap for the sake of cheap, go right ahead.

But your money will probably offer a much better return if invested other places.

-geoff

 

[Mani]

short

Edit: NEVER buy a stock just because it's cheap.

 

[Night201]

Originally posted by: Mani
short Edit: NEVER buy a stock just because it's cheap.

I know that. I think they are a decent company and I thought buying maybe 30 shares would be good.

 

[arcas]

I think they are a decent company and I thought buying maybe 30 shares would be good.

The sales commission you'll pay (for instance, E-Trade will charge $20 per nasdaq trade) will be comparable to what you're paying for the stock.

Let's say you buy 30 shares at $3.50 each. That's $105. Add $20 sales fee. Total of $125 to get 30 shares. When you go to sell, you're going to get nailed for another $20 sales fee. So you'll need SUNW to jump by more than 38% just to break even when you sell. Moral of this story: don't make such small trades. The only one who'll benefit is your broker.

(aside: I've been preaching to alot of people that things are winding down for Sun but I'm not going to jump on that soapbox this time )

 

[ChrisIsBored]

c'mon guys... i've got about 150 shares of Sun that i'd like to sell off eventually without losing some money... you're supposed to say it's the best damn buy you've seen since the tech boom started.

 

[Night201]

Originally posted by: arcas

I think they are a decent company and I thought buying maybe 30 shares would be good.

The sales commission you'll pay (for instance, E-Trade will charge $20 per nasdaq trade) will be comparable to what you're paying for the stock. Let's say you buy 30 shares at $3.50 each. That's $105. Add $20 sales fee. Total of $125 to get 30 shares. When you go to sell, you're going to get nailed for another $20 sales fee. So you'll need SUNW to jump by more than 38% just to break even when you sell. Moral of this story: don't make such small trades. The only one who'll benefit is your broker. (aside: I've been preaching to alot of people that things are winding down for Sun but I'm not going to jump on that soapbox this time )

I don't work with a commission broker. It would cost be only $3.50 to buy $100 of shares. It would have to go up 3.5% for me to break even. Oh, and if I really wanted to sell, it would cost again, only $3.50.

So, I'd have to make 7% on it. It would have to go to 3.75 for me to break even if I wanted to sell.

 

[arcas]

How are you able to buy Nasdaq stocks and pay only $3.50 per trade?

What's your secret?

 

[manly]

Originally posted by: dullard
Everytime this thread comes up I say the same thing. Sun is slow, expensive, and one more thing your employees need to know how to run and fix. Thus Sun has really no chance of getting new customers anytime soon. Their current customers don't seem too enthused either. So with each thread I say I wouldn't buy it. Over the years Sun's stock has declined slowly to match my thoughts.

So ask yourself do you really think the new Ultra Sparc IIIi will suddenly make a desireable product? If yes, put your money where your mouth is. If not, then don't. I'm not convinced their upcoming chips will suddenly be fast, cheap, and easy to use and fix...

Think about its new competition: Intel and AMD. The Itanium 2 will start selling (at major OEMs) any day now. The AMD Hammer will be out in April. I don't jump into a company that will suddenly have much more competition.

Your analysis is generally flawed. It's premised on the notion that Sun is a CPU producer and little else, which is completely wrong.

Sun is a systems provider. They consciously made the choice to continue developing UltraSPARC CPUs in house because they felt the costs were justifiable. HP discontinued PA-RISC because they felt developing a next-gen CPU was too expensive (and so they threw in their lot with Intel). Right now, it appears on that issue alone, Sun and IBM made the right choice as Itanium was dead on arrival.

As far as their stock, it has sank in the past two years like every other NASDAQ issue. This alone doesn't mean much. By that reasoning, we should all be scared that MS and Cisco are going the way of the dodo bird as well.

I do feel Sun has serious business challenges now and upcoming, and many of the biggest questions have yet to be answered. The bottom line is they fled the workstation business to capitalize on the server business as the previous was commoditized. Now that Wintel is doing the same thing to low to mid-range servers, Sun's core business is definitely being pressed from the low-end up. Sun has a not insignificant software division, but they simply don't know if it's a profit engine (after all, they are a systems company).

Even if UltraSPARC does not compare favorably to IBM Power4, it's the rest of the system hardware that sells their machines. It's irrational to apply your desktop PC purchasing criteria (which single CPU is the fastest?) to big iron. It's completely laughable to compare AMD to Sun. AMD to date hasn't even been able to make a faint crack in Intel's market for low-end SMP workstations and servers.

 

[Scarpozzi]

Sun is a great company.....but Solaris support is so expensive that I fear Sun will eventually lose their primary market. I know most sendmail users are switching to Linux and saving on Solaris support. Xerox is using a lot of Sun systems these days, but they also have a contract with HP (formerly Compaq) for controllers as well. Invest if you dare, but you might be able to find a better pick somewhere that will really take off when the economy does a 180.

 

[dullard]

Your analysis is generally flawed. It's premised on the notion that Sun is a CPU producer and little else, which is completely wrong.

Sun is a systems provider. They consciously made the choice to continue developing UltraSPARC CPUs in house because they felt the costs were justifiable. HP discontinued PA-RISC because they felt developing a next-gen CPU was too expensive (and so they threw in their lot with Intel). Right now, it appears on that issue alone, Sun and IBM made the right choice as Itanium was dead on arrival.

As far as their stock, it has sank in the past two years like every other NASDAQ issue. This alone doesn't mean much. By that reasoning, we should all be scared that MS and Cisco are going the way of the dodo bird as well.

I do feel Sun has serious business challenges now and upcoming, and many of the biggest questions have yet to be answered. The bottom line is they fled the workstation business to capitalize on the server business as the previous was commoditized. Now that Wintel is doing the same thing to low to mid-range servers, Sun's core business is definitely being pressed from the low-end up. Sun has a not insignificant software division, but they simply don't know if it's a profit engine (after all, they are a systems company).

Even if UltraSPARC does not compare favorably to IBM Power4, it's the rest of the system hardware that sells their machines. It's irrational to apply your desktop PC purchasing criteria (which single CPU is the fastest?) to big iron. It's completely laughable to compare AMD to Sun. AMD to date hasn't even been able to make a faint crack in Intel's market for low-end SMP workstations and servers.

I think you are misunderstanding me. I never mentioned single CPUs in my post. The Sun systems are slow, expensive, and one more thing your employees need to learn to run and fix. Thus I truely feel that they aren't going to be getting much new business. No new business and any company will eventually die. I don't see anything up Sun's sleeves that will change that fact in the near future. I've used several Sun systems and I disliked them all - and I think many people would agree with me that they are very overpriced for what you get.

I realize that the whole NASDAQ dropped - but it didn't drop very far (it is at about 1/3rd of its high). At the same time Sun dropped from 60 to 3.5 (it dropped off a cliff). If Sun only dropped the same as the rest of the NASDAQ it would be near 20.

You disagreed with my logic that Intel is applying pressure, then you stated "Now that Wintel is doing the same thing to low to mid-range servers, Sun's core business is definitely being pressed from the low-end up." I'm not sure how to respond. You cannot say I'm wrong and then state the same thing I just stated.

I realize that AMD has not been a threat yet. But it has a very, very small chance of having a hit with Opteron. I wouldn't base my stock choice on that alone since I think Opteron will be a flop. But Itanium 2/3 won't be a flop once it starts selling.

Sun's stock is near a 6 month high. You have not stated any reason to think it will soon reach a 1 year high (needed for anyone to make any money on it's stock). I say it will remain flat or go back down to the upper 2's.

 

[manly]

Originally posted by: dullard

Your analysis is generally flawed. It's premised on the notion that Sun is a CPU producer and little else, which is completely wrong.

Sun is a systems provider. They consciously made the choice to continue developing UltraSPARC CPUs in house because they felt the costs were justifiable. HP discontinued PA-RISC because they felt developing a next-gen CPU was too expensive (and so they threw in their lot with Intel). Right now, it appears on that issue alone, Sun and IBM made the right choice as Itanium was dead on arrival.

As far as their stock, it has sank in the past two years like every other NASDAQ issue. This alone doesn't mean much. By that reasoning, we should all be scared that MS and Cisco are going the way of the dodo bird as well.

I do feel Sun has serious business challenges now and upcoming, and many of the biggest questions have yet to be answered. The bottom line is they fled the workstation business to capitalize on the server business as the previous was commoditized. Now that Wintel is doing the same thing to low to mid-range servers, Sun's core business is definitely being pressed from the low-end up. Sun has a not insignificant software division, but they simply don't know if it's a profit engine (after all, they are a systems company).

Even if UltraSPARC does not compare favorably to IBM Power4, it's the rest of the system hardware that sells their machines. It's irrational to apply your desktop PC purchasing criteria (which single CPU is the fastest?) to big iron. It's completely laughable to compare AMD to Sun. AMD to date hasn't even been able to make a faint crack in Intel's market for low-end SMP workstations and servers.

I think you are misunderstanding me. I never mentioned single CPUs in my post. The Sun systems are slow, expensive, and one more thing your employees need to learn to run and fix. Thus I truely feel that they aren't going to be getting much new business. No new business and any company will eventually die. I don't see anything up Sun's sleeves that will change that fact in the near future. I've used several Sun systems and I disliked them all - and I think many people would agree with me that they are very overpriced for what you get.

I didn't misunderstand you at all. A major part of your analysis was specifically stated with respect to the UltraSPARC IIIi CPU and the possible threat of Itanium 2 or AMD Hammer. While I didn't specifically state it in my rebuttal, let me say that businesses don't buy Sun boxes for the CPU, but for the integrated package. While it may appear to consumers like yourself and I that Sun does not have a strong value proposition, an evaluation based on the prevalent CPU benchmarks and selling price alone is not compelling. Or will AMD be designing 8-way and up SMP systems that I haven't heard about? They still have to convince major OEMs to sell their products outside of the budget consumer space.

You clearly feel I inferred more than I should have, but I don't see any problems with my original reply. Whether or not I'm correct is a different story.

I realize that the whole NASDAQ dropped - but it didn't drop very far (it is at about 1/3rd of its high). At the same time Sun dropped from 60 to 3.5 (it dropped off a cliff). If Sun only dropped the same as the rest of the NASDAQ it would be near 20.

You disagreed with my logic that Intel is applying pressure, then you stated "Now that Wintel is doing the same thing to low to mid-range servers, Sun's core business is definitely being pressed from the low-end up." I'm not sure how to respond. You cannot say I'm wrong and then state the same thing I just stated.

I realize that AMD has not been a threat yet. But it has a very, very small chance of having a hit with Opteron. I wouldn't base my stock choice on that alone since I think Opteron will be a flop. But Itanium 2/3 won't be a flop once it starts selling.

No, I didn't disagree with any logic that Wintel is threatening Sun's business from the low-end up. Everyone and their grandma already knows that. To reiterate, IMO the way you framed your argument is simplistic as it implies the performance of a CPU die is going to make or break it for Sun (or by extension, IBM enterprise servers). I agree Itanium 2 poses a real threat to UNIX systems providers, but AMD Hammer is not a competitor, period. To be more precise (and this is assuredly a point we agree on), it's actual Wintel servers shipped by Dell and HP (among others) that is cutting into Sun's core business.

Sun's stock is near a 6 month high. You have not stated any reason to think it will soon reach a 1 year high (needed for anyone to make any money on it's stock). I say it will remain flat or go back down to the upper 2's.

Although this thread was ostensibly about SUNW, I was arguing only against your evaluation of their current business model and prospects. I purposely chose not to address the question of whether it's worth buying SUNW or any stock price target, except to state I believe the statement, "Over the years Sun's stock has declined slowly to match my thoughts," is somewhat flawed. I apologize for not elaborating on this issue, as I tried to stay focused on the meat of your argument rather than stock valuation.

Based on what you originally said and added in reply, you're certainly entitled to your opinion (basically you don't like Sun hardware, nor feel the cost is justified) and I'm certainly entitled to disagree with the analysis.

 

[3L33T32003]

Great article in the current esquire about investing. Looks like the tobacco companies are the best stock buy right now. Tech is crap.

 

[Ameesh]

manly , the question you should ask yourself is that if you owned a big company and you had a choice to buy 1 32 cpu Sun Enterprise 10000 Server at a cost of 1.44 Million dollars or would you rather have a cluster of 1806 Dell Poweredge 250 rackmount servers at the same cost? which would you pick? Its very obvious from just a pure TCO perspective the wintel platform provides developers with a lot cheaper, flexible, and more powerful solution.


sun is gonna get owned by its competitors.



(also think of the point where if a cpu fails in your sun box how much is it going to cost you?, i propse if one of your dell boxes fail after the warenty is up, i'd say throw it out you have another 1805 units to play with)

and i think you dont even want to get into the cost of support or the cost of total software packages. thats even a more lopsided argument

 

[Ameesh]

bump for an interesting topic.

 

[goodoptics]

Originally posted by: Night201
It's so cheap. Like $3.xx/share. I think I might buy some next week. Opinions & thoughts about Sun...

Calls or puts? I don't believe that the bear market has completely run its course yet.
Invest wisely, good luck.

 

[toant103]

AMD, ATYT, NVDA.

 

Sun made a lot of money in the 90's with it's workstations. Today those workstations have been replaced mostly with Wintel. Linux is going to hurt sun in the low-end server market. There is just too many alternatives to Solaris for it to be overall profitable anymore. Java never made them any money and I don't see it ever happening. It will probably go full OSS once Sun starts running out of reserves.

Bottom line, the Sun is setting.

 

[Linux23]

I don't know much about Sun's products, but is there a reason to buy a Sun system over a WINTEL system? Can Sun's CPU's compare in performace to an Intel chip?

 

[Zebo]

Almost all stocks are a pyamid scheme. If you have extra monies start your own business, buy property, or invest in stocks that pay dividens, many do thier called value stocks/funds. JMO

 

[LittleWolf]

The Sun systems are slow, expensive, and one more thing your employees need to learn to run and fix. Thus I truely feel that they aren't going to be getting much new business. No new business and any company will eventually die. I don't see anything up Sun's sleeves that will change that fact in the near future. I've used several Sun systems and I disliked them all - and I think many people would agree with me that they are very overpriced for what you get.

I think you are taking a very simplistic view of the whole thing. If you actually look around a lot of "real" & big mission critical systems especially on wall-street and big banks still run predominantly on Sun (& IBM) hardware. Granted these days lot of folks are actively looking at Wintel and Linux to reduce costs. But seriously I don't think Sun's gonna go the way of dodo anytime soon. They are smart and have an uncanny knack in the past of bouncing back. While I am not saying that they are a hot company right now or will have a smooth fairing/great growth, they still have good bit going from them. Also unlike Intel etc, Sun's doesn't own any fabs. They outsource it from TI and so their investments are limited to chip design and not manuf much.

Secondly what do you know about their future stratergy. McNeally isn't exactly a dumb guy. He knows the factors are loaded against him and I am sure he's thinking of actively fighting back. Also what's to say that they may not merge with somebody ? The other day there was an article in one of the wall-street mags about Sony & Sun being a good fit. Sony has a good hold on consumer side and wants server side ammo and Sun can provide that. They can probably help each other, who knows... Maybe Sun might buy/merge with AMD and fight Intel :Q

All said and done, it's sure a knowing risk you would be taking by buying Sun stock. (But then isn't stock market all about risks) But personally I would place my odds with Sun bouncing back. Good luck with your decision!