From last week's Barron's (you can cut and paste non-current). However, interview is post clinton Crash.
"Say It Loud: High Tech and Proud"
By HOWARD R. GOLD
Excerpt from: An Interview with James Oelschlager.
Technology stocks have been among the most
rewarding -- and volatile -- groups in recent years,
but that hasn't stopped Jim Oelschlager from
buying or holding them enthusiastically. His White
Oak Growth Fund has more than half its assets in
big-name tech stocks that have been in and out of
favor this year, which has paid off big for the fund's
shareholders, who have now sunk more than $300
million in assets in White Oak. Oelschlager
believes in making concentrated bets on the sector
-- and on some of its largest stocks
Q: Let's talk about your favorite
stocks. Cisco Systems has been on the
top of your list for some time. That is
your biggest holding as of Sept. 30.
What more is there to say about Cisco
at this point?
A: Cisco will continue to grow at a
minimum of 30% a year for the next three
or four years. There may be surprises,
and they may do better than that. I will
now say that is a minimum level, and that
is a pretty decent growth rate for a
company that has grown substantially faster than that and is dominating a
market that is growing very rapidly -- wide area networking and the Internet.
I don't think anybody thinks the Internet has stopped growing.
Q: I hope not, at least for BARRON'S Online's sake. When Cisco is facing
competitive pressure they either buy out their competitor or acquire
some core competency in an area to extend their reach.
A: In the past, some companies have taken the attitude of, if it is not
developed here, it is not worth having. But Cisco has gone out and bought
other little niche companies that had things to bring to the party. And the other
thing we haven't mentioned is that large companies like Cisco or Intel have
humongous R&D budgets. They are going to keep coming up with stuff. They
are going to be in the catbird seat. If someone in a garage comes up with a
little better idea in a little niche area, maybe Cisco will go out and buy him. It's
their stated policy to buy about 12 or 15 of these companies a year.
Q: Cisco stock has done well, but it hasn't performed quite as well as
some of the other tech companies this year. Is that correct?
A: It hit a new high on Tuesday, but the percentage gain is not as high this
year. It has come on pretty strong in the last few weeks. It was up by a huge
amount last year. If you look at too short a time frame, if you look to the last
couple of years, it has still done very well. It went down to the low 40s in the
spring and it is now up 83.
Q: That would have been a good buying opportunity. Did you buy more
around there?
A: Sure I did.
Q: On the subject of networking, 3Com is another big holding of yours.
A: They are the number two player out there, and they are going to do very
well. It is a fast growing market, and the valuation on that stock is probably
even cheaper.
Q: Has it also come back? They were hit a bit early in the year.
A: They had that stock down to 25. It is now 46. It did get up over 50, but in
the last few days they have been beaten up, of course.
Q: What kind of earnings growth do you see for 3Com at this point?
A: I think 3Com can also grow in the 30% a year range.
Regards |
