Sun Gard Is Shining

For a tech company on its way to becoming a major player in Internet services, SunGard Data Systems (SDS) achieved a near-impossible feat: It dodged the bullet in the April massacre, when almost every other tech or Web-related stock got shot down. Big Board-listed SunGard, trading at 39 in late March, sagged only modestly, to 30 9/16, during the market's record decline. What shielded SunGard?

"SunGard's link with the Old Economy and its rising earnings--with lots of cash--enhanced its appeal as a safe haven," says Andrew Jeffrey, an analyst at FleetBoston Robertson Stephens. SunGard provides data-processing support and disaster-recovery services to the investment community. Its software systems provide specialized help in valuing portfolios, performing complex accounting calculations, and keeping inventories of securities. SunGard's disaster services maintain alternate data-processing sites for customers' use in the event of fire, power failure, or other disaster.

SunGard Is Shining

SunGard serves more than 10,000 global clients, including 47 of the world's 50 largest financial institutions--Citibank, Bank of America, and Wells Fargo, among them. IBM has chosen SunGard to be a partner and provide infrastructure for application service providers powered by IBM's AS/400e servers. Such services come under SunGard's eSourcing unit, which focuses on the Internet. This eSourcing "gives SunGard significant upside potential," says Jeffrey, and shows that SunGard is quickly moving its business to the Internet. Jeffrey says the stock will hit 60 in the next six to nine months, based on his earnings estimate of $1.60 a share in 2000 and $1.92 in 2001. "We would be aggressive buyers of SDS shares at these levels," says Jeffrey.

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