Thread: nice mention in MSN MoneyCentral Investor today...
moneycentral.msn.com
Interviews
Don't give up on Net stocks!
Abel Garcia, fund manager for Waddell & Reed, says Internet plays are ever-more attractive for the long term. Here's why he's hanging in there with Yahoo!, Amazon and Inktomi.
By Eneida Guzman
Internet stocks have rebounded some since we spoke with Abel Garcia on the eve of his vacation earlier this month. But the 50-year-old tech-sector specialist's advice still holds. You have to pick your spots carefully, he says, adding that the big drops in the prices of several Internet names only make them more attractive for the long term.
Garcia manages both the $100 million Waddell & Reed Science & Technology (WRTBX) fund and the $2 billion United Science & Technology (UNSCX) fund. He scours large-, small- and mid-cap markets to find companies that are increasing their earnings in excess of 20% a year and whose products, processes or services are expected to benefit from scientific or technological discoveries and developments. His approach has rewarded the Waddell & Reed fund's shareholders to the tune of a 33% year-to-date return. The United fund has returned 16% so far in 1999.
MSN MoneyCentral spoke with Garcia from Waddell & Reed's Overland Park, Kan., headquarters.
..."Outside of the Internet space, what earnings growth stories stand out in technology?
I'd say Rambus (RMBS). It's a fab-less semiconductor company, which means they don't make (fabricate) their own devices. They are different in the sense that they are almost like a software company. They have a very fast DRAM that, when incorporated with Intel's (INTC) products, accelerates the processing speed. Several large chip companies such as Micron Technology (MU) and Texas Instruments (TXN) are licensing it. Rambus' DRAM could become the standard, which is a big threat to their competitors. They have a big lead on everybody else. Because they license their technology, like software companies, their operating margins are exploding to about 50%. They generate a lot of cash and their earnings are going through the roof. It's a pretty volatile stock, but I think it's going to be big in the next 12 months. We expect Rambus to earn 32 cents a share this year and 80 cents a share in 2000." |
