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Technology Stocks : Kyocera [NYSE:KYO]

KYO 55.15

-1.9%

Jun 25 5:00 PM EST

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To: Labrador who wrote ()	5/3/2000 11:11:00 PM
From: q_long	of 45

Good KYO article I like the following technology stock and believe that it will outperform over the next few months from its current lows. The company is Kyocera (KYO). I consider it the Nokia (NOK) of Japan. Why Kyocera when you can buy Nokia? The difference is: Kyocera is a diversified industrial company in Japan which competes with Nokia in the wireless communication markets, but also manufactures components for both semiconductors and optical networking. The handset business is booming (in case you haven't noticed). While the handset business was a money loser for Qualcomm(a business Kyocera acquired from Qualcomm), Kyocera has turned that business into a profitable enterprise withing 6 months of the purchase. I believe that is a stunning achievement. In addition, the Japanese have always been strong in consumer electronics and in manufacturing, two strengths that are likely to serve Kyocera well when it competes against Nokia. Trust me, I own Nokia and I like them a lot. But at these prices (getting cheaper) I like Kyocera even better. One portfolio manager I respect has claimed that: "the reported p/e after adjusting for Kyocera's stake in DDI (the second largest wireless phone company in Japan) is about 35 times, but its growth p/e is just 22 times expected 2001 earnings". Kyocera is expected to grow at 37% next year and hence trades at a discount to its growth rate. Compare this to a cellular handset pure-play such as Nokia which trades at 80, a stunning two times its projected growth rate of 40%. Kyocera's price today: $134 but I suggest that you wait and buy near its 200-day moving average of $120. In conclusion, it is always a good thing to look at technology companies that are trading at reasonable P/E's when the whole market is skittish about paying sky-high P/E's for just above-average growth rates. (Disclosure: As of this writing, I hold none of the stocks/options mentioned in this column except long NOKIA, though positions can change anytim

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