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Tech Waking Up with JAVA


Sun Microsystems could possibly make a run back to the double digits, given stronger end markets.

Mr. Udall,

Are you familiar with Sun Microsystems (JAVA)? It just broke the 200 dma. Any insight on that? I've been having a feeling that lots of money has been flowing into tech. Thanks in advance.



I'm very familiar with the former SUNW, now JAVA. I had a trade on and took it off recently, so that quick little gain isn't looking so smart at this point... But I digress. A trade is a trade.

Sun Micro could keep going quite a bit more but I'm inclined to try and buy it on selective "bad" days... days where it's down about what it was up today. Sun is a good play on my bandwidth-constrained world thesis, but it is a peripheral play. Not a direct play for me like Ciena (CIEN), Broadcom (BRCM) or Harmonic (HLIT).

Sun has opened up its systems to sell them with more OS's and that should continue to help. It is still benefiting from the huge Microsoft (MSFT) settlement of a couple years ago that infused an extra few bln in cash on the balance sheet. It has also made a couple of acquisitions that have bolstered slumping sales. Ultimately organic sales growth, more strategic mergers or some combo of those two should drive this stock. Competition is extremely intense but niches seem to have developed and customized solutions may be starting to be worth premiums again. If that is the case then JAVA could keep percolating... I've been waiting for that one.

A trip to prior 52 week highs would not be surprising given any continued market strength and since the day it received that monster Microsoft payment I've thought SUNW/JAVA could possibly make a run back to the double digits, given stronger end markets.

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