Shares in Sun Microsystems (SUNW) have not traded below $5 since October 2006. The company keeps introducing new blade servers and in late May, Matrix Research joined the list of research firms that have upgraded their ratings on the stock.
But, Wall St. is uneasy about the shares.
During the first quarter, Sun’s piece of servers shipped in the US during Q1 declined from 4.4% last year to 3.7%. That put the company into fifth place behind Fujitsu. The leader, HP (HPQ) has 30% of the market, and Dell (DELL) had over 21%.
In mid-May, Sun announced it would buy-back $3 billion in shares. Some investors wondered if that was the best use of the company’s money. Others were concerned that it was a way to increase EPS in the face of flat revenue and net income.
In short, the signs out of Sun has not been very good.
And, the share price shows it.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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