Jack,
You are right. It is George Kelly. Here is the news:
All-Star Analysts 1996 Survey:
Telecommunications Equipment
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By Gautam Naik
Staff Reporter of The Wall Street Journal
Phone companies are increasing capital spending to meet increased demand for services,
particularly Internet access and wireless communications. This has the All-Star analysts sounding
bullish about equipment makers' prospects.
George J. Kelly, of Morgan Stanley, was the top stock picker in the group last year. He racked
up a 130% return, thanks to an outrageous 696% gain in Ascend Communications and healthy
gains in three of his other five picks. He was an All-Star the previous two years, for the accuracy
of his earnings estimates.
Mr. Kelly's main theme at the moment is "Internet infrastructure." To pick winners, he relies on
frequent conversations with customers and distributors. "I focus on understanding the demand" for
a company's product, he says.
Right now, Mr. Kelly especially favors Bay Networks, a maker of hubs and routers that act as
traffic cops for Internet information. A weak first quarter spooked many analysts, but Mr. Kelly is
betting that Bay will beat prevailing expectations.
Despite last year's huge rise in Ascend, Mr. Kelly sees room for further gains. Ascend makes gear
used by Internet-access providers. Demand for such gear "is surging and will continue to surge for
the next two years," he says.
Cascade Communications, another maker of Internet-related gear, is also on Mr. Kelly's buy list.
No. 2 analyst James A. Stone, of Buckingham Research, made his All-Star debut with a 123%
return. His big winners were PictureTel, up 116%, and Vtel, up 107%. Mr. Stone prefers stocks
that are out of favor or ignored by other analysts. An engineer by training, he sums up his
stock-picking philosophy this way: "You have to be a technology leader or you're nothing in this
industry."
His current picks are Vtel, a fast-growing video-conferencing company; Allen Group, which
makes wireless-communications gear and provides consulting and engineering services; and TSX
and C-Cor Electronics, both makers of cable-related gear.
Alex Cena, who placed No. 3 with a 110% return while at Lehman Brothers, has since jumped to
Bear Stearns. His best gainers were PairGain Technologies, Gilat Satellite and Qualcomm. He was
an All-Star last year for estimate accuracy in the computer-networking category.
These days, Mr. Cena likes ADC Telecommunications, a maker of transmission gear for phone
and cable-TV carriers. He's also bullish on Qualcomm, which could benefit from the sale of
wireless gear and the licensing of its digital wireless technology, and Lucent Technologies an
AT&T spinoff-in-progress that he says will lower operating costs as it downsizes.
Mr. Cena says he's especially inspired when he's in the woods, hunting. In 1994, he chased elusive
caribou in the Arctic circle; next year he's heading for Alaska to hunt moose and grizzly bears.
"Sometimes you have to step back from the minutiae and look at the big picture," he says. "I do
my best thinking in the woods."
-- From wsj.com |
