1/30/98 Dow Jones News Serv. 13:48:00
Dow Jones News Service
Copyright (c) 1998, Dow Jones & Company, Inc.
Friday, January 30, 1998
Tech Cos. -3: Disappointment Factored Into Stk Prices -- MSFT
Waddell & Reed's Herman said the fourth quarter treated software companies
such as BMC Software Inc. (BMCS) and service-oriented computer companies like
Electronic Data Systems Corp. (EDS) more kindly than hardware manufacturers.
And the networking companies tended to present a more solid outlook than
other sectors, despite worried about Asia. Particularly strong were companies
leading efforts to increase bandwidth, said Cowen & Co.'s Chris Stix. He
mentioned Bay Networks Inc. (BAY), Cisco Systems Inc. (CSCO) and Ascend
Communications Inc. (ASND) as companies poised to fare better in 1998.
Portfolio managers and analysts agreed that whatever happens in the March
quarter, many technology stocks have disappointment figured into their stock
prices. And some technology bulls say that the group is due for a broader
rebound.
James Townsend, chairman and portfolio strategist at SoundView Financial
Group, has been waiting for the group to scrape bottom for a few months. And he
thinks that finally happened Jan. 9, when the Nasdaq Composite Index fell by
the second-most points ever.
"Looking to the March quarter, hopefully the expectations are (built into the
stock prices) and, with any upside from the European theater, we could have a
better-than-expected quarter," Townsend said. "That remains to be seen, but at
this point I'm recommending that investors be overweighted in technology."
-Christopher Grimes; 201-938-5253
(END) DOW JONES NEWS 01-30-98
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