Kurlak's comments on P-II
Seek 'quality' in picking tech stocks - Merrill
NEW YORK, May 7 (Reuter) - Seeing more room for a rally in the technology sector in the next several quarters, Merrill Lynch chief investment strategist Charles Clough recommended that investors "stay with quality," especially companies with proprietary technologies.
"There's still money to be made" in technology stocks, Clough said in a telephone conference call to clients on Wednesday. He warned of "disappointments" in secondary software companies.
The Nasdaq Composite, which suffered a sharp decline from January through April, began moving up on April 28. The index closed down 0.41 to 1322.91 on Wednesday.
Six Merrill technology analysts, joining Clough in the late-morning conference call, cited their top stock picks:
Among technology blue chips: Compaq Computer Corp , Microsoft Corp , Xerox Corp , and International Business Machines Corp .
In semiconductors: Intel Corp , Micron Technology Inc , and Texas Instruments Inc .
Among telecommunications equipment: Lucent Technologies Inc and Tellabs Inc .
In the computer services sector: Computer Sciences Corp and First Data Corp .
Analyst Tom Kurlak said the semiconductor industry is "quite strong" with pricing of semiconductors "firming" and low inventories.
Kurlak said he sees 15-18 percent growth in worldwide shipments this year.
Kurlak said he expects Intel's new Pentium II computer chip to be "the biggest product ever produced by the company."
Lucianne Painter, the personal computer analyst, said she expected the commercial market to continue to be the "bread and butter" of sales.
She said Compaq was "still the best value in the group," and set a price target of $100-$105. Shares rose 2-3/8 to 92-1/2 on Wednesday.
She described Microsoft as the "undisputed leader" in PC software, and set a short-term price target of $130 and long-term at $150.
Analyst Dan Mandresh said he seeks IBM selling for $195 in 1998. Shares closed down 2-7/8 to 162-1/8 on Wednesday.
He said IBM "defies easy categorization (because) it has almost one dozen major businesses."
He said he sees annual revenue growth of eight to nine percent, "at the expense of gross margins."
He said IBM "has more than adequate resources for another acquisition."
On Xerox, Mandresh sees the stock selling at $80. Shares closed up 1/
_______________________________
Michael Olsen
molsen@dnai.com |
