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VMware, Inc. Message Board

  • seedyleaf seedyleaf Jan 25, 2008 7:35 PM Flag

    Time to get out

    I am long on this stock currently to the tune of 2,500 shares, plus an additional 2,000 EMC, but I have spent the day reviewing the stock and the earning expectations, etc. I am thinking about dumping the stock on Monday, in a bull market, I am holding this in to the earnings, but the way MSFT was treated today, and AAPL earlier this week. I think it might be time to tap out. I may hold the EMC shares, but VMW's P/E and expectations are too high for a bear market. Given that, I think it is a good long term stock, and a great hold, but not on margin (as I am). My basis is around $80. Longs, I really want to hold this through Monday, anything I am missing? Please convince me.

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    • If it's good enough for Intel and Cisco, I'm long.

      This company has no competition, yet, and it saves other companies big money. Morgan Stanley or JP Morgan also
      said something about it.

      I wouldn't be on margin for any reason.

      The return OF your money is much more important than the return on your money. You're rolling dice and losing control with margin.

      Would you dance on a wire? that's what you're doing on margin.

    • to get back in.

    • I'm bullish on this and look at IBM and microsoft numbers and believe tomorrow and for the next few weeks should be good and put this stock and emc back on track. I'm long EMC share and wrote covered call at 22, took the premium a few months back, I bought puts on VMW and enjoyed this ride. I covered my put or sold them and now will ride this back as I have long shares EMC and bought Calls on VMW. This is the wau to do it as VMW PE at the time was too rich. There is 20 point here on the upside It could pop qickly like on Garmin where it had a 13 point day. Hold off on selling as we should be about 19 on EMC and 90 on VMW in a short time, after that is dertermined on the market. We're in an environment where the Fed is lowering rates, this is good to be long in.

    • seedleaf, my advice to you is to sell 80% of your VMW holding. We are in the bear market plus you can bet on the increasing competition for VMW with MSFT, ORCL and many other competitors. That says you will see margin squeeze and potential loss of market share as well. You will also see the further cut of tech spending further into 2008 and not to forget the free lock up period for the VMW's insiders starting to sell their stock. Don't forget the insiders' cost is much lower than your cost. You must understand that there is nothing wrong of taking profit. Learn to discipline and take profit. The system is set up only to reward those who know to take profit without being too greedy. Trust me, you won't regret it if you take profit. There is no way that you can sell the highest price in this market, but you can be sure that nothing can go wrong when you secure your profit and put away in the safe place to get prepared for a safer entry point again.

    • You could consider selling February calls against your position and use the volatility to your advantage. For example, Feb $85 calls can be sold for around $4. That number could increase Monday as speculators buy ahead of earnings.

      • 1 Reply to jesselavaca
      • Not to worry on VMW I guess. I'm very +ve that the earnings will beat expectations and this one is about to shoot up after 4:00 p.m tommorrow. If you look at the history of this stock, there have been many days when the market declined but this went up, Friday being an example of this pattern. I don't disagree that this has, at times, fallen pretty vigorously along with a falling market, but then again, it has shot back to the mark of $80 soon enough. My take for tommorrow's earnings are $550 mln+ (taking into account the deferred revenue annoucement during last earnings). Though not all of that deferred revenue might have been recognized by the end of last year, but i'm very positive that a major portion of it would've been. Most of the orgns. starting up new projects in the beginning of the year would've already bought the products by Dec..

        I've lost $10k on VMW during Oct-nov 2007 decline but i'm still very bullish on it. The market for sure is bearish but then lately MSFT went up after dipping down and apple too didn't lose much after the earning's evening decline, FSLR too went up after 3 successive days of decline and these stocks have been showing a bullish pattern for the past few days, except for Friday when the market was down as a whole.

        People should be careful, specially those who have loaded VMW, since there are a lot of bashers out here who want to cover up before the earnings tommorrow. These shorts want you to sell some or entire stock of VMW and then make big money on it after the earnings. I'm sure people out here would've seen some really big trades in the last 3 days, one of them being AHs on Friday for 150,000 @ $80.44. These are institutional purchases which happen only when the big guys have trust in the orgn.. So just watch out for these shorts who would wanna cover up early morning tommorrow.

    • Only you can decide what's right for you, especially if you own the shares on margin.

      My view is that there will be modest gains next week. It won't break $90 in this environment, but the solid earnings expected on Monday will portend what longs have known for some months -- great company, with great future prospects. The key here is "future". The high P/E is supported b/c investors know that the company will grow into a more reasonable ratio given its projected growth rate. You never know when the big upticks in the stock price will happen. It usually goes in fits and starts, and sometimes quite unexpectedly. You need to have a position to take advantage of them. If you look at January's stock price, VMW weathered the turbulence well. It never went below $70. I would be surprised to see it go south of there after posting solid earnings. But again, don't expect a big pop in this environment even with a good earnings announcement. Not now. But I think that at some point, later this year or maybe next, VMW will be way up again.

      Perhaps a less risky strategy would be for you to reduce your position and buy more (and less expensive) EMC shares to perhaps benefit that way. But full disclosure here: I own EMC, not VMW.

    • Are you making decision when to sell or buy based on another stock action?

      Funny one.

      MSFT action is what I call profit taking same goes to the general stock market today. This pullback is healthy setting up for the bulls next week.

    • I think we'll beat, but I cna't afford to lose $40K if we dont.

 
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