1.
Light at the end of the tech tunnel?
siliconinvestor.com
Mark Johnson, Editor of the Internet Financial
Connection, provides the following interview with
Art Hogan, chief market strategist at Jefferies &
Company. Below is the write-up.
Remember what happened on January 3 of this year?
The Federal Reserve cut interest rates by half a
percentage point. The markets reacted positively,
with the Nasdaq leaping a record 329 points, or
14 percent on the day. Since then, technology
stocks have been seesawing as profit worries
continue to plague technology stocks.
Art Hogan, chief market strategist at Jefferies &
Company, believes that technology stocks are
oversold and are trading below historical valuations.
He notes that many of the large-cap technology
names offer a lot of value.
Hogan is extremely upbeat about the ongoing
buildout in the telecommunications sector. "We are
very optimistic with the very rapid pace in which
the Internet will grow in the next few years,"
he says.
One of Hogan's favorites is GlobeSpan (GSPN 30 1/2),
which makes the advanced digital subscriber line
(DSL) integrated circuits that enable high-speed
transmissions over existing copper telephone wires.
Hogan is also favorable toward America Online
(AOL 47 1/4), believing the company is "very
undervalued" at its current price. "AOL has fallen
in with the rest of the bad apples in the Internet
space. . . I think the company should perform rather
well over the next several years," he says. Another
beat-up Blue Chip name he finds attractive is Intel
(INTC 33 3/8) -- and he views the sell-off in that
stock as overdone.
Two other large names Hogan feels will benefit
from the buildout of Internet backbone and networking
are Cisco (CSCO 39 1/8) and EMC (EMC 73 1/8). "Both
of those names are going to be a necessity as we
move into the next part of the buildout in
telecommunications and the Internet. . . Both have
been beaten down and are going to be huge winners
longer term," he states.
Hogan mentions that a friendlier interest rate
environment is favorable for the equity markets as
well as the financial stocks. He likes Investment
Technology Group (ITG 42 3/4), which provides
equity trading services and transaction research
to institutional investors and brokers.
Hogan notes that credit card companies greatly
benefit from declining interest rates. Providian
Financial (PVN 55 3/4) is one such company that
stands to benefit from declining interest rates.
In the oil and natural gas space, two companies
Hogan considers undervalued are Teekay Shipping
(TK 36 3/8) and Remington Oil and Gas
(ROIL 12 3/8). "The equity valuations of these
two companies have certainly not come up to the
commodity price."
Hogan cautions that investing in equities is
always a risky endeavor. He recommends that
investors should have a long-term time horizon
when investing in the stock market. |
