.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

Dear E.B.:

About a dozen columns or so ago, I suggested that Yahoo! Inc. (YHOO-$28.05) was having trouble keeping its act together and reported that some observers think Yahoo! is scouring the bottom of the barrel to find help. Though the network is attracting new users, advertising revenues are increasing and fee revenues are growing, the company’s 2007 net income will continue its nose dive from 2005 and 2006, and some think 2008 might continue lower. The reason is that some of those YHOO people are real yahoos. Yahoo! stock, trading at 54 times this year’s earnings, is as overpriced as an airport hot dog.

Net profit margins are collapsing to 8.6 percent this year, operating margins have fallen, and so has return on capital and shareholders’ equity. Until recently, you couldn’t find Sun Microsystems on the Yahoo! Finance Web Site, because the YHOO people didn’t know that Sun Microsystems stock symbol had been changed to JAVA from SUNW.

Anyhow, in late July YHOO broke its $24 support level, and some think it’s headed to the teens. If you must buy the stock, consider the mid-teens as an entry point but certainly not at its current price. Management is no help. Chief Executive Officer Jerry Yang, who co-founded YHOO in 1994 while at Stanford University, ought to return to Stanford. And Chairman Terry Semel, whose tenure at YHOO has been enormously underwhelming, ought to return to making kites.

Sun Microsystems Inc. (JAVA-$6.05) took over Storage Technology in late 2006 hoping that this acquisition would breathe new life into Sun. Au contraire! The stock ran all the way up to $6.80, and a few months later JAVA resumed trading in the low $5 to mid-$4 range. I doubt that the stock of this supplier of servers, workstations, storage devices and software will ever trade in the teens, certainly not $100 again, and I think you gotta be crazy to own it.

Competition is nipping at JAVA’s heels, demand in the United States and the United Kingdom is wimpy, and unfavorable currency shifts and high labor costs for its 36,000 employees have not helped earnings this year. I believe that 2008 won’t show much of an improvement over 2007, and the longer term doesn’t appear to augur well, either. I think JAVA is mired in a $6 to $4 trading range, and I wouldn’t care to pay more than $4.25 for the stock.

Intel Corp. (INTC-$25.66), a $37 billion revenue company that makes integrated circuits for communications equipment, personal computers, industrial automation, the military and other electronics equipment, is a waste of time. There are two main reasons that INTC is stuck in the $19 to $25 trading range: (1) Growth in the PC industry has slowed to a crawl and (2) The competition — especially from Advanced Micro Devices Inc. — is intense, so net profit margins, which were 25 percent to 31 percent a few years back, are now lucky to come in between 15 percent and 18 percent. Though earnings, which have been regularly irregular, will improve to $1.10 per share from 86 cents in 2006 and possibly to $1.30 in 2008, I feel the stock has lost its panache. Its past glory doesn’t mean borscht to today’s investors, who remember INTC when it traded at $150 a share. Forget it.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.© Copley News Service