Cherry-picking, that's what I've been doing the past few days. T, WCOM, MRK, LU and BEBE. My low bids the last few days missed a few others lke WLA and PFE. Like PSFT too. Have you seen all their ORCL-like ads?
Question is, do we ignore the upcoming October jinx and plan to hold through to 2000? Could get bouncy there. I predicted awhile back that because everyone is EXPECTING an October crash it won't happen because people will bail out earlier, maybe even in August (like last week?). And everyone expects stocks to zoom in january once Y@K isn't the end of the world.
Rande was right to bail out a month ago, but two days ago was definitely the time to jump back in. Sure it will bounce up and down so there will be more opportunities, but we may not see deals like we did for awhile. A 14% correction on the Naz seemed to clear out the weak and profit-takers.
As for T hitting the low-mid 40's it's already at a PE of 20 down from $60. Also the company has incentive to get the price back over $51 so they don't have to pay more for their cable acquisitions. I expect T to double or triple in time once their net infrastructure is in place.
Another place to look for bargains is beaten-down software firms like CHRZ, WIND, PSFT, CRYSF, KEA. CHRZ for instance has a PE of 8 and has excellent earnings, down from $32 to $12. These firms are moving more and more into net and e-commerce servicing a la Oracle and could duplicate ORCL's recent recovery. Predictions I've heard say that these IT firms should rebound sharply next quarter then soar into 2000 back to high PE's. They are no longer Y2K companies. Their sights are on the future.
I also see value in certain nets, especially those likely to be taken over like MSGP and ELNK. Consolidation will definitely keep going. Also beaten-down e-commerce stocks as we get closer to the Xmas season. Ditto for beaten down retailers. Ought to be a profitable Christmas.
Basically I feel pretty bullish. The former Fed guy on CNBC this morning said that the Fed may state a bias toward raising rates but will stand pat until Y2K passes because they don't want to add further fear to the economy. They believe Y2K fears may do enough damage on its own.
My only worry is oil prices. Gas prices are high now. I haven't been studying the situation but that's inflation pure and simple. On the other hand they could come back down fast if oil-producing nations pump up production. I've heard OPEC wants prices to remain pretty much where they are.
As for COMS, it's down near its recent low at 23+. Their Pilot business is booming and some say that division alone is worth $23 a share. They will have to merge or get bought out sooner or later. It's a safe play here with a great upside IMHO. Remember COMS went to 50+ last fall on takeover speculation DURING the crash period even. No reason that can't happen again.
DCTI is a great trading stock between 5 and 7 lately. Soner or later it will break through 7 as it's begun reporting excellent revenues.
More opinions welcome. As usual, I could be wrong. |
