Unisys, EarthWeb, Solectron, Apex PC Solutions

This week's ideas include a Web site operator and makers of circuit boards and switching systems.
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Aselection of some of the most intriguing tech stock ideas on the Web.Theitems presented do not represent the views of

TheStreet.com

;rather,thecollection is offered as a service to our members who may be scanningthe Webfor stock-related information.

Unisys

Robert Metz

(12/15)

Ever since

Burroughts

and

Sperry

merged in 1968 to better compete with

IBM

(IBM) - Get Report

, the combined company,

Unisys

(UIS) - Get Report

, has done poorly. It was weighed down by debt, and a shrinking market for mainframe computerscut profits. But a new management team that arrived a year ago is turning things around, says

Money Talks stock columnist Robert Metz.

Since the arrival of Chairman and Chief Executive Larry Weinbach from

Andersen Worldwide

, the stock has more than doubled. Besides bringing in a "heavy focus on profitability" from Andersen, Weinbach and his team also have developed good skills in managing humanresources, which is particularly important for Unisys' growing services business. Indeed, with a de-emphasis of mainframes, services may contribute alittle over half of 1999 operating profits, up from 41% this year.

Goldman Sachs

analyst Gregory Gould tells Metz he sees 20%-plus earnings growth in the next couple of years. He anticipates earnings per share of $1.04 in 1998 (up 128% over 1997's earnings) and $1.24 in 1999. Shares were trading at 33 1/16 at Friday's close.

More information can be found at:

www.talks.com

EarthWeb

Bill Schaff

(12/14)

EarthWeb

(EWBX)

operates a number of Web sites for information technology professionals. These sites "provide valuable resources," says

InformationWeek

stock columnist Bill Schaff, but he doubts the stock's lofty valuation is justified.

Shares were originally floated at 14 in late November. They quickly rocketed to85 and settled back, closing Friday at 41 3/16. The company had $1.9 million in sales for the firstnine months of 1998, and revenue is projected to reach $17 million in 1999. Butthe company is not expected to be profitable until 2001. Schaff admits price-to-earnings ratios have become meaningless with Internet stocks. He notes that

Bear Stearns

has a 40 price target for the stock for the end of 1999, but "I don't have a price target because I have no clue what a fair price is today," he says.

Schaff does venture that while EarthWeb's advertising charges of $68 per 1,000 impressions are higher than average, "Internet companies that rely primarily on advertising for revenue don't deserve these sky-high valuations." He notes that dominant advertising players

Interpublic Group

(IPG) - Get Report

and

Omnicom

(OMC) - Get Report

sell at multiples of 30 times earnings, which are low only in comparison to Internet stocks.

More information can be found at:

www.informationweek.com

Solectron

Online Investor

(12/16)

Shares of

Solectron

(SLR)

, a contract manufacturer of circuit boards andelectronic equipment, rocketed this week after the company reported better-than-expected earnings. The stock has more than doubled this year, and the good news should continue as more and more companies cut costs by outsourcing manufacturing, says

Online Investor

.

The market for high-tech manufacturing has beenincreasing by 25% yearly, and Solectron has been expandingby acquiring other manufacturing operations. As it buys smallercompanies and cobbles them together into a one-stop shop solution, Solectron isable to widen the margins commonly associated with contractmanufacturing.

Solectron reported 71% growth in revenue lastquarter and a 42% increase in net income for the past three years."While Solectron is not one of those racy Internet stocks," says

Online Investor

, "it also hasn't been racing to the downside like somany other stocks lately. Solectron seems to have established awell-defined role behind the scenes."

More information can be found at:

fnews.yahoo.com

Apex PC Solutions

Stephen Quickel

(12/16)

Apex PC Solutions

(APEX) - Get Report

is a small maker of network switching systems, with $70 million in sales and 75 employees. Value investor Stephen Quickel of the

US Investment Report

likes the stock's projected five-year annual growth rate of 35% and the fact that the stock trades at an earnings multiple well below that growth rate.

At 27 3/4 at Friday's close, the stock is trading around 20 times Quickel's estimate of next year's earnings of $1.40, up from $1.10 in 1998. If earnings grow to $1.99 in 2000 and the stock trades at a slightly higher 22 times earnings, it would reach the low 40s, Quickel says.

And for investors wary of the liquidity risk of small-cap stocks, Quickel says Apex's float and daily trading volume are sufficient to minimize that concern.

More information can be found at:

www.investools.com