Sun Getting Cheap

Stocks are down. My old standby, Sun Microsystems, has been wandering among prices below $4. I mentioned in February when I suggested selling at prices between $5.50 and $5.85 that my goal was to buy back in somewhere below $4.

So here we are and I must be buying, right? Not yet. I’ve noticed since I started swing-trading Sun about two years ago that the low and high points of its swing range are gradually rising. My experience started with Sun at about $2.50 in September 2002. Then it rose to $4.25. Then it settled to $3. Then it rose to $5.50. Then it settled to $3.25. Then it rose to $5.90. Now it’s back at $3.86. You can see the action on this two-year chart.

From that general improvement, I think it’s wise to set the new buying trigger at $3.75 and below. I’d love to get more shares at around $3.50 and there’s a small chance that the summer doldrums — what with high gas prices, increasing terror danger, and rising interest rates on the way — could knock Sun back down below $3.25. I’d keep buying all the way down. I expect Sun to finally get above $6 on the next up cycle, perhaps from September to December.

About that time frame I really have no idea, though. What I do have an idea about is the value that Sun represents at prices below $3.75. It has a good franchise, tech spending is picking up, and Sun’s offerings are more diverse than they’ve been in the past.

As always, I’ll let you know when I buy and at what prices. You can either check this space from time to time, or enter your email into the field at the top of this page to get my free financial planning newsletter.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.
  • Here are your three options:

    Option 1: Annual Subscription

    For just $236.97 per year, you’ll receive everything listed above to completely upgrade the way you manage your investments, including a copy of The 3% Signal. This is what I recommend:



    Option 2:Monthly Subscription

    If you'd like to try The Kelly Letter  without paying the full year, you can pay $19.97 per month, but it will not include a copy of The 3% Signal :


    Option 3:Free Email List

    If you'd like to hear more from me but aren't ready to part with any money yet, you're welcome to join my free email list:

    Join the free list






    Thank you for the work you do. You're a household name here and my wife and I often discuss your letters on Sundays. My ten- and seven-year-old children recognize your name and will eventually be taught to invest using 3Sig and 6Sig. You've had an enormously positive impact on our investing and inspired me to look at the world in more rational and clear terms than I did years ago. I'm sure that thousands of others would say the same. Kelly Letter subscriber Matt Barnes
    Matt Barnes
    Product Line Director
    OCLC

    Join Matt and thousands of other rational investors to invest without stress.

    Subscribe to The Kelly Letter  now!

Bestselling Financial Author