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[Bera]

While software stocks were starting to look attractive for a while as the market made a momentary lapse back to reason and sensible value, they've now become expensive again. For instance, the average stock in Walravens' universe of B2B and supply-chain management stocks is now trading at 87 times 2002 earnings. Beleaguered Ariba takes the prize for the most ridiculously priced stock, at 467 times Walravens' 2002 earnings estimate. It's followed by Matrix One (MONE:Nasdaq - news), priced to a perfect 113 earnings, and always-expensive Agile Software (AGIL:Nasdaq - news), trading at 84 times that period's estimated earnings. . .

Analysts who are uncomfortable with these run-ups don't see any justification for them other than an oh-so-90s urge among investors to just own tech stocks. That could come back to haunt them.

"We've simply got a crazy rally here," says Doug Augenthaler, an analyst with CIBC World Markets. "Things are getting kind of insane again."

"People are expecting a quick turnaround, like this is a one- or two-quarter thing," says Jon Ekoniak, B2B analyst at U.S. Bancorp Piper Jaffray. "I don't think this is a quick turnaround. I don't think the worst is over. There's more bad news to come."


http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15759092

  
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