Andrew Neff Quotations

We still see IBM attractively valued at a 13 percent discount to S&P multiple.

When we downgraded the PC stocks in September, we were concerned about signs in the weak consumer demand -- which has continued to deteriorate. Now we are seeing signs of this weakness spreading into small/medium corporate and of aggressive pricing in low-end servers. This weakness is bound to spread.

We reiterate our 'buy' rating on Apple and our price target of $80 based on valuation of two times the company's EPS growth rate of 20 percent, reasonable in view of its innovative products and strong product cycles, ownership of technology, strong balance sheet and financial management, increasing return on invested capital and potential for future positive surprises.

We're seeing alliances, not mergers, among leaders, which reflects clearer thinking about what is good.

The extent of Apple's pre-announcement and the laundry list of problems that the company cited lead us to believe that its woes are as much company specific as they are industry related and the demand for products is just not there.

Six of the seven last years, technology stocks have been weak around that time period. June, July has usually been around a bottom.

More importantly, we are rather surprised by the launch plan for Mac OS X. Apple plans to release the new OS into stores in March and then bundle onto systems in July -- which creates the potential of a lengthy stall by customers waiting for the new OS.

He is taking the right steps. He is setting milestones and hitting them. It's what's important.

It corroborates our view of a renewed sense of vigor and competitive spirit at HP.

It is a show-me situation. They need to improve revenues and so far they haven't.

Our point is that, like other cyclical businesses, this overcapacity has to get worked out.

Steve Jobs' presence at the analyst meeting can help to energize the financial community and offset some of the 'sell on the news' pressures.

While the earnings-per-share outlook was inline with expectations, Network Appliance provided a positive revenue outlook for the fourth-quarter with IBM business just beginning to ramp.

We believe this means more growth and the potential to further extend its lead in the server arena.

We believe Adaptec is not a compelling storage networking story at this point, as we think most of the value of ADPT shares lies in its software business.

We upgraded Compaq because we see clear signs of a turnaround beginning to gain traction with good pick-up in business momentum.

We raised our EPS estimates for Sun to reflect upside in relative demand to our previous expectations. Sun management indicated that demand trends were ahead of its expectations ... and that business halfway into the quarter was very strong across the board.

We are encouraged by the new product launches, which are timed in front of the back to school season. While a low-end product would have margins below Palm's corporate average of 39 percent, we have already incorporated this expectation into our revenue and margin assumptions.

The reason we are optimistic about IBM's prospects is that with the worst very likely behind it - Y2K freezes, the problems in the HDD business and slump in services revenues that impacted 1Q00 - second-half 2000 is likely to turn up strong for IBM.

While we are very confident about the firm's underlying fundamentals ... Network Appliance's rich multiples require continued strong upside surprises and estimate increases, both of which are unlikely to happen near-term as the law of large numbers catches up with the company.

While the stock could remain under pressure near term, we maintain our 'buy' rating on IBM owing to a compelling second-half story.

The operating numbers were not as good as advertised.

We continue to view the stock pullback as a buying opportunity, with Apple's price-to-earnings at 17 times our calendar 2007 operating earnings-per-share estimate.

We think the company has multiple engines of growth coupled with better execution against the goals of diversifying its revenue streams.

The stock's rich multiple requires continued strong upside surprises and estimate increases -- both of which are unlikely to happen near-term as the law of large numbers catches up with the company.

Compaq is No. 1 in the retail segment, they're No. 1 in the high end of the business. In the small-business segment, they don't have the same market share they have elsewhere. The key for Compaq is how well they'll execute.

A year ago, I didn't know what to make of him. But I've been impressed with what I've seen.

This is an industry that needs some consolidation. There are some structural issues that need to be addressed.

This is the continuation of state consolidation in the oil sector.

This is the best possible scenario for Dell.

As we have said before, the investor owns IBM for its consistent earnings and cash flow growth and relatively high degree of earnings predictability.

It's either another Digital Equipment or another turnaround like HP or IBM. Right now, the jury is still out.

It's good for Compaq at the margin, because it helps them fill out their product line, and it is good for IBM at the margin because it helps them to sell storage.

The odds are long that someone would buy Gateway.

They were probably a little behind the curve, but it's still early in the game. Compaq needed a partner for an ASP opportunity. They tried to address it on their own, but this is probably a more effective way to be doing it.

Investors do not appreciate the superior financial dynamics at Apple and do not accord it the valuation it deserves - because, in our minds ­­-- Apple is still viewed by many as a reformed alcoholic - just one step away from returning to the gutter. We have a different view and think there is a great team.

I don't think this is a total shock, given what their competitors have done.

The impact on Apple is not clear yet. But the French are late; Microsoft and Apple are already dominating the market.