12/1/99
Money
1999 WL 7855620
Money Magazine
Copyright 1999
Wednesday, December 1, 1999
Issue: December 1999 Vol. 28 No. 12 Special Double Issue/The Net Century
Investing/Stocks/Word On The Street
Word On The Street What's up with Saks, Xerox, Gillette, Berkshire Hathaway
and more
Sarah Rose; Lisa Reilly Cullen; Peter Carbonara; Pablo Galarza; Pablo Galarza
. . .
--SARAH ROSE
Xerox stock stuck in copier jam
It's always tough to buy a stock that no one else loves. But David
Giroux, an analyst at fund giant T. Rowe Price, says it may be time
to snap up beaten-down shares in Xerox (XRX). "It's a blue-chip stock
whose reputation has been tarnished," he says. "This is the time you
make money in a stock."
Xerox could certainly use a repairman. Abysmal results--thanks
largely to increased competition and a costly sales-force
reorganization--sent the stock down 52% this year. In a humiliating
mea culpa, CEO Richard Thoman confessed that earnings would stink
through mid-2000.
Few on Wall Street will touch Xerox today. "People might see it as
a speculative buying opportunity, but you can't say you've got
confidence in earnings growth in the near term after the recent
news," sniffs Rudy Hokanson, an analyst at CIBC World Markets. But
Xerox sure looks cheap. At a recent $28, it trades at only 12 times
latest 12-month earnings vs. 29 times for the S&P 500. It also boasts
a 2.8% dividend yield, and it's No. 1 in its industry. Giroux vows,
"The first good quarter this company has, the stock is going to run."
--AMY FELDMAN |
