Something positive (sort of)
ATHM mention in this article....
Mutual Funds
Jan 31, 2000
Dessauer Globals Value Favorites
Research Analyst: Bob Hirschfeld (1/31/00)
The Dessauer Global Equity Fund (NASDAQ:DGLEX - news) has been on a tear lately.
For the past three months, this $68 million world stock fund has returned 20.6% compared with a 10% return for the S&P 500 index.
Fund manager Thomas McIntyre attributes the results to a long-term perspective, patience, and picking solid entry points in shares of companies that are leaders in key global trends, such as telecommunications, financial services, technology, and health care.
McIntyre is enthusiastic about LSI Logic (NYSE:LSI - news) , a large semiconductor holding, which is a maker of high performance integrated circuits and storage systems predominately in the semiconductor industry. The stock has turned into a ?five-bagger? for the fund.
McIntyre took the opportunity to add shares of Lucent Technologies (NYSE:LU - news) , a company that, even though it recently missed its numbers, is ?something we?re grabbing,? he says. Lucent tumbled to a low of $49.875 per share in mid-January, near its 52-week low of $47 after announcing it would have an earnings shortfall tied to its flagging optical operations.
McIntyre told shareholders in a weekly address that Lucent?s operational issues are temporary and that the company should regain its momentum during the second half of the year. McIntyre expects Lucent to record earnings-per-share growth of about 20%-25% for the year.
The manager added, ?Lucent is one of the world?s greatest companies,? and noted that, ?within six months, this will be viewed as a fantastic opportunity to buy a world-class company at a 20% discount.?
McIntyre has also been buying ExciteAtHome (NASDAQ:ATHM - news) , a company providing Internet services and digital telecommunications to consumers and businesses, which is growing subscribers faster than America Online (NYSE:AOL - news) and ?might get bought by someone,? he says. However, AT&T (NYSE:T - news) does have a large stake in the company.
McIntyre has also taken a new position in Tyco International (NYSE:TYC - news) , the highly diversified manufacturing and services company that has been on an acquisition binge. The stock did well for years, but was recently knocked down from the $50 per share level to the $30s amid accounting concerns.
Now trading at a 15 multiple, McIntyre has been buying. Pointing out the company may release a tracking stock for its under-the-ocean cable properties, McIntyre said, ?we think there?s a lot of smoke, but no fire,? to the charges of accounting irregularities, adding, ?I think there?s no solid evidence that Tyco has any serious problems.?
The manager says be recently returned from visiting management at Houston-based Enron Corp. (NYSE:ENE - news) , the integrated natural gas and electricity company that is increasing its holdings in fiber optics.
Noting he had been buying shares since the summer of 1997 when no one wanted them, the manager pointed out that the current valuation of Enron?s telecom business is estimated at $40 per share and of the rest of the company is worth about $45 per share -- a total well in excess of the recent price of about $60 per share.
McIntyre thinks highly of management as well, noting, ?These guys are winners.?
The manager has the flexibility to find value in a variety of sectors and industries throughout the world.
For example, McIntyre says Philips Electronics (NYSE:PHG - news) , a Dutch company offering ADRs in the U.S., runs a very solid semiconductor business. Though now trading at $150 per share, McIntyre scooped up shares 13 months ago at the $50 per share level. What?s more, McIntyre says Philips is still a value play, given its modest price-to-earnings multiple of about 22 times estimated 2000 earnings.
McIntyre also likes Elan Corp. (NYSE:ELN - news) , an Ireland-based drug delivery company that is transforming itself into a pure pharmaceuticals concern. Once again, the manager sees great value, given that the company will likely earn $1.50 per share in 2000, and that shares trade at a big discount to its growth rate. The shares are at a discount despite the fact that the company has a great product pipeline and is a potential buyout candidate.
McIntyre also enjoys adding to established positions in long-term holdings such as Swiss pharmaceuticals giant Novartis, noting that when the shares stumbled a bit, ?you typically only get one or two shots at lower prices, and you have to take those shots when they come.? |
