COMMENTARY -- Weekend ramblings:
Folks worry about growth over the next few quarters, especially as Inktomi absorbs FastForward Networks. Let the nervous nellies have their day; the reality is that Inktomi the company looks as solid as ever.
Forward guidance from Inktomi executives remained bullish. Looking at the larger industry picture, outlook from JDS Uniphase (Nasdaq: JDSU) indicates high-speed optical network demand will continue to be strong. As long as that network buildout continues, demand for Inktomi's caching technology will be there.
That's not bad considering Ingram generated revenue of $7.83 billion in the fourth quarte of last year. Ingram also continues to revive its gross margin.
This morning's gains have brought IM stock nearly in-line with competitors such as Tech Data (Nasdaq: TECD). At its current price around 16, Ingram is valued at roughly 11.5 times estimated earnings for the next 12 months, compared to a forward multiple of 12.2 for TECD shares, which also gained ground today.
Tech distribution generally has been a lousy sector for investing this year. But parts prices are falling now, margins are rising and demand looks reasonably healthy for 2001. Other industries would love to be in that kind of situation.
Yet investors decided to lift the stock by 21 percent, taking NBCi out of the penny stock realm. Considering NBCi still has an awful lot to prove, you'd have to conclude that people simply decided shares had been beaten up enough, regardless of what the future may hold.
Now? Not even a 63 percent plunge is enough to dissuade folks from a merger. In other words, they ended up agreeing with Barry Diller's contention that Internet stocks deserved a far lower valuation than previously thought. Diller just happened to say it a year too early.
That might be the biggest advantage that Old Economy offshoots have over their pure Internet counterparts -- the clicks-and-bricks guys can always return home. 22GO>